You are here
Efficiency and Equity in the Time Pattern of Teacher Pension Benefits
Defined Benefit pension plans often generate odd time patterns of benefits. One typical pattern exhibits low accrual in early years, accelerating in mid-late years, followed by dramatic decline, or even negative returns in years that are relatively young for retirement. We consider four states for specific analysis: Arkansas, Missouri, California and Massachusetts. There are interesting variations among these states' formulas, which affect the incentive to retire early. We identify key factors in the defined benefit formulas that drive such patterns and likely consequences for employee behavior. We examine the efficiency and equity consequences of these systems and lessons that might be drawn for pension reform.
Keywords: Pension, Retirement, Incentives
Citation: Robert Costrell, Michael Podgursky (2007). Efficiency and Equity in the Time Pattern of Teacher Pension Benefits. CALDER Working Paper No. 6
You May Also Be Interested In
The Impact of a $10,000 Bonus on Special Education Teacher Shortages in Hawai‘i
Roddy Theobald, Zeyu Xu, Allison Gilmour, Lisa Lachlan-Hache, Liz Bettini, Nathan Jones
The Long and Winding Road: Mapping the College and Employment Pathways to Teacher Education Program Completion in Washington State
Dan Goldhaber, John Krieg, Stephanie Liddle, Roddy Theobald
The Effects of Comprehensive Educator Evaluation and Pay Reform on Achievement
Eric Hanushek, Jin Luo, Andrew Morgan, Minh Nguyen, Ben Ost, Steven Rivkin, Ayman Shakeel
See other working papers on:
Research Area: Educator preparation and teacher labor markets