The coming crisis with teacher pensions

A new report from the Thomas B. Fordham Institute finds that if state lawmakers fail to address the looming crisis of skyrocketing teacher-retirement costs, the impact on district budgets and classrooms will be substantial. The report analyzes costs and projects future retirement obligations in Philadelphia, Milwaukee, and Cleveland, which it characterizes as cautiously optimistic (Milwaukee) to problematic (Cleveland) to bleak (Philadelphia). For example, the District of Philadelphia could find itself spending as much as $2,361 per pupil by 2020 on retiree costs alone, a tenfold increase from its current level. Leaders in two of the three states (Wisconsin and Ohio) passed impactful legislation that will place their districts on firmer financial footing, though they still face long-term uncertainty. In both Wisconsin and Ohio, employee pension contributions were raised and health benefits reduced, but by different methods. In Wisconsin, Milwaukee Public Schools was freed to cut retiree health costs without union assent. Ohio raised employee contributions, reduced benefits by increasing age and service eligibility requirements, eliminated an enhanced multiplier for teachers with more than thirty years of service, and reduced cost-of-living adjustments. Pennsylvania's long history of deferring pension funding presages disaster, according to the report. More

Source:  Public Education News Blast

Published by LEAP

Los Angeles Education Partnership (LAEP) is an education support organization that works as a collaborative partner in high-poverty communities.