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Chad Aldeman June 2019

Dollars and Sense: Understanding Teacher Pensions. Chad Aldeman June 2019. Are teacher salaries changing in your state? Why or why not?. How is education spending changing in your state or local school district?. What terms should reporters know before diving into pension research?.

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Chad Aldeman June 2019

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  1. Dollars and Sense: Understanding Teacher Pensions Chad Aldeman June 2019

  2. Are teacher salaries changing in your state? Why or why not?

  3. How is education spending changing in your state or local school district?

  4. What terms should reporters know before diving into pension research? • Pension: A retirement plan that awards guaranteed monthly payments to qualified workers, based on a benefit formula • Normal cost: The plan’s estimate of how much the promised benefits will be worth; typically captured as a percentage of salary • Unfunded liabilities: The difference between the plan’s promised future benefits and the amount it has saved to pay those benefits • Amortization (or debt) cost: The plan’s estimate of how much it will cost to pay down unfunded liabilities; typically captured as a percentage of salary • “Employer” contribution rate: Amount contributed on behalf of workers; typically captured as a percentage of salary; can be paid by states or districts

  5. Benefits for workers have gotten worse over time, even as total costs have risen How are pension contributions changing in your state?

  6. When will new data come out in your state? • 46 states have fiscal years that end on June 30th • Pension plans typically release their Comprehensive Annual Financial Reports (CAFRs) soon afterwards • In the CAFR, try searching for “employer contributions” or “contribution rates” • Note the distinction between the “normal cost” of benefits and total contributions • Some states also publish standalone pages, designed for employers (school districts), on contribution rates over time

  7. If you aren’t already, follow your state’s teacher pension plan… • Follow them on Twitter • Subscribe to their media updates • Attend their quarterly meetings • Their decisions affect schools in your state!

  8. How are school districts responding to these pressures? • Put it in context: What does it mean for school board leaders or superintendents? • Are there new revenues to help compensate, or are things being cut? • What would district leaders do differently if they weren’t facing rising benefit costs?

  9. Bonus: How are health care benefits in your local district similar or different? • How have the district’s health care costs changed over time? • What gets covered? • Who decides what gets covered? • How are costs shared between the employer and employees?

  10. Find more info at: Follow us on Twitter @ChadAldeman @TeacherPension

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