Report: R.I. earns B- on teacher pension policy

PROVIDENCE – Rhode Island has earned a “B-” on a new report card on teacher pension policy from the National Council on Teacher Quality.

Released today, “Doing the Math on Teacher Pensions: How to Protect Teachers and Taxpayers,” breaks out and challenges the claims of pension boards and other groups about the cost-effectiveness, fairness and flexibility of the traditional defined benefit pension plans still in place in 38 states.

The study includes report cards on 50 states and the District of Columbia, as well as detailed analysis of state teacher pension policies.

According to the “snapshot” of Rhode Island, benefits include the fact that retirement eligibility is based on age only and that pension benefits accrue in a way that treats each year of work uniformly. However, the study does not find teacher and employer contribution rates reasonable in Rhode Island; teachers are not vested in three years or less; teachers do not have a fully portable plan; and the system overall is not funded better than 90 percent.

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Nonetheless, Rhode Island’s favorable grade ranks the state sixth in the country, after Alaska, South Dakota, Florida, Michigan and Ohio. Three other states earned a “B-”: Tennessee, Utah and Washington.

In Rhode Island, unfunded liability of teacher pensions total $1,439,612,019, with about 58.1 percent of the system funded, according to one chart in the report. According to another, teacher participation rates have dropped in Rhode Island from 9.5 percent in 2008 to 3.8 percent in 2014.

According to the report’s key findings, overall debt load across the country has increased by $100 billion since the last analysis in 2012 to $499 billion in unfunded liabilities nationwide.

Only eight states and the District of Columbia have well-funded teacher pension systems – Delaware, Idaho, North Carolina, Oregon, South Dakota, Tennessee, Washington and Wisconsin. Rhode Island’s system is recorded as meeting the goal “in part.”

Since 2008, more than half of the states have increased the amount teachers must contribute to state retirement systems, the report found. States are also making it harder for teachers to receive benefits, with vesting periods longer than three years and as long in some cases as 10 years.

“The math on state teacher pension policy doesn’t add up,” said NCTQ Vice President Sandi Jacobs. “The funding crisis is staggering, yet the structure of most states’ pension systems isn’t giving teachers what they need. Too often the debate around pension reform pits teachers against taxpayers or school districts or other public sector employees. But pension reform is not a zero-sum game. There are ways to change the systems and to also give teachers what they deserve. Everyone loses – teachers most of all – when the pension crisis is ignored.”

The National Council of Teacher Quality is a non-partisan research and policy group that works to restructure the teaching profession based on the belief that all children deserve effective teachers.

The report can be found HERE.

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