Search nctq.org

Or search by choosing a tag
Training and Recruitment

Teacher Prep, Licensure, Student Teaching

Staffing

Hiring and Assignment, Supply and Demand, Teacher Diversity, Work Day

Evaluation and Support

Evaluation, Professional Development, Retention and Tenure

Compensation

Pay, Benefits

Pension Sustainability: Wisconsin

Retaining Effective Teachers Policy

Look at National Findings
Goal

The state should ensure that excessive resources are not committed to funding teachers' pension systems.

Best Practice
Suggested Citation:
National Council on Teacher Quality. (2011). Pension Sustainability: Wisconsin results. State Teacher Policy Database. [Data set].
Retrieved from: https://www.nctq.org/yearbook/state/WI-Pension-Sustainability-9

Analysis of Wisconsin's policies

As of December 31, 2010, the most recent date for which an actuarial valuation is available, Wisconsin's teacher pension system is 99.8 percent funded and has a 19-year amortization period. This means that if the plan earns its assumed rate of return and maintains current contribution rates, it would take the state 19 years to pay off its unfunded liabilities. Both levels are better than regulatory recommendations, and Wisconsin's system is financially sustainable, according to actuarial benchmarks.

Wisconsin does not commit excessive resources toward its teachers' retirement system. The mandatory employee contribution rate to the defined benefit plan is 6.2 percent, and the current employer contribution rate is 4.8 percent. Both of these rates are reasonable considering the fact that districts and teachers are also contributing to Social Security. Employer contribution rates are actuarially determined. 

Citation

Recommendations for Wisconsin

State response to our analysis

Wisconsin recognized the factual accuracy of this analysis and was helpful in providing NCTQ with facts that enhanced it.

    • Best practice
    • Meets goal
    • Nearly Meets goal
    • Meets goal in part
    • Meets a small part of goal
    • Does not meet goal

  • Wisconsin

    Wisconsin map
Pension Neutrality
Select another topic
Delivering Well Prepared Teachers
Expanding the Pool of Teachers
Identifying Effective Teachers
Retaining Effective Teachers
Exiting Ineffective Teachers
Research rationale

NCTQ's analysis of the financial sustainability of state pension system is based on actuarial benchmarks promulgated by government and private accounting standards boards. For more information see U.S. Government Accountability Office, 2007, 30 and Government Accounting Standards Board Statement No. 25.

For an overview of the current state of teacher pensions, the various incentives they create, and suggested solutions, see Robert Costrell and Michael Podgursky. "Reforming K-12 Educator Pensions: A Labor Market Perspective." TIAA-CREF Institute (2011).

For evidence that retirement incentives do have a statistically significant effect on retirement decisions, see Joshua Furgeson, Robert P. Strauss, and William B. Vogt. "The Effects of Defined Benefit Pension Incentives and Working Conditions on Teacher Retirement Decisions", Education Finance and Policy (Summer, 2006).

For examples of how teacher pension systems inhibit teacher mobility, see Robert Costrell and Michael Podgursky, "Golden Handcuffs," Education Next, (Winter, 2010).

For additional information on state pension systems, see Susanna Loeb, and Luke Miller. "State Teacher Policies: What Are They, What Are Their Effects, and What Are Their Implications for School Finance?" Stanford University: Institute for Research on Education Policy and Practice (2006); and Janet Hansen, "Teacher Pensions: A Background Paper", published through the Committee for Economic Development (May, 2008).

For further evidence supporting NCTQ's teacher pension standards, see "Public Employees' Retirement System of the State of Nevada: Analysis and Comparison of Defined Benefit and Defined Contribution Retirement Plans." The Segal Group (2010).

We use cookies

We use cookies to recognize your repeat visits and preferences, as well as to measure the effectiveness of campaigns and analyze traffic. To learn more about cookies, including how to disable them, view our Privacy and Cookie Policy. By clicking "Accept" or by continuing in the site you consent to the use of cookies unless you have disabled them.

Dismiss Accept