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Is It Time To Rethink Teacher Pensions In Maryland?

By Michael Podgursky, Ph.D.
Published on Tuesday, December 05, 2006
STUDIES

The Abell Foundation and the Maryland Public Policy Institute have released a joint study that challenges the claim that Maryland’s teacher pension system is hampering teacher recruitment and retention.  

The study, authored by University of Missouri economist Michael Podgursky, Ph.D., a specialist in the teacher labor market, finds that Maryland’s traditional teacher pension system was on par with peer states. His findings will likely be controversial; coming just months after the 2006 General Assembly approved an expensive increase in teacher pensions, and prior to a 2007 General Assembly in which the state’s teachers union is expected to push for an additional increase. More importantly, the study raises the question: If the teacher retirement plan is on par with other states, then why is Maryland really losing young teachers to other states?

In “Is It Time To Rethink Teacher Pensions In Maryland?” Prof. Podgursky finds that in terms of simple income replacement rates, the traditional Maryland teacher pension system did appear to be among the worst in the nation. However, this measure does not accurately reveal the value of teachers’ pensions.  

Podgursky finds: “Given the high professional mobility of public school teachers, education policy makers should consider providing Maryland teachers with a defined contribution alternative to the current system — a plan that would ‘travel with’ mobile teachers.”

Available in Adobe Acrobat PDF format.

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