NCTQ's analysis of how dangerously underfunded most state pension systems are has set reporters abuzz in recent weeks. Add to that mix new research from Cory Koedel and Michael Podgursky, who provide more evidence that these troubled pension systems affect not only state coffers but teacher quality as well.
Koedel and Podgursky set out to examine what effect, if any, policies governing teachers' retirement eligibility had on the composition of the teacher workforce. For instance, if they cause ineffective teachers to stay longer than they would otherwise or effective teachers to leave earlier than anyone would prefer.
Koedel and Podgursky divided a group of teachers in Missouri into three groups that bear a similarity to the three bowls of porridge that Goldilocks contemplated: 1) those who remain in their jobs because the pension benefits will get better if they wait; 2) those who retire from teaching at the most advantageous time in terms of their pension benefits; and 3) those who prematurely leave the classroom because--wacky though it may be--their benefits would actually diminish if they were to wait any longer.
Unfortunately, Koedel and Podgursky found that the teachers in the last group, the "pushed-out" teachers, were more effective than the composite average teacher, meaning districts are losing effective educators and experiencing classroom turnover because when teachers are pondering whether to stay or leave, making a sound financial choice outweighs any other consideration.
The traditional structure of teacher pensions, claim Podgursky and Koedel, creates many perverse incentives. However, they also claim that even if we could purge pension systems of wackiness, they still have one big problem: they don't appeal to bright young prospective teachers who want a benefits package that is less deferred and more mobile.