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Most public school teachers in the United States are enrolled in defined benefit (DB) pension plans. Using administrative micro data from four states, combined with national pension funding data, we show these plans have accumulated substantial unfunded liabilities -- effectively debt -- owing to previous plan operations. On average across 49 state plans, an amount that exceeds 10 percent of current teachers' earnings is being set aside to pay for previously-accrued pension liabilities. To the extent that the costs of the unfunded liabilities drag on teacher compensation, they may exacerbate problems of teacher recruitment and retention. We briefly discuss three policy changes that could end or reduce the accumulation of unfunded liabilities in educator pension plans: (1) transition teachers to defined-contribution retirement plans; (2) transition teachers to cash-balance retirement plans; and (3) tighten the link between funding and benefit formulas within the current defined-benefit structure.

There is increased policy interest in extending test-based evaluations in K-12 education to include student achievement in high school. High school achievement is typically measured by performance on end-of-course exams (EOCs), which test course-specific standards in a variety of subjects. However, unlike standardized tests in the early grades, students take EOCs at different points in their schooling careers. The timing of the test is a choice variable presumably determined by input from administrators, students and parents. Recent research indicates that school and district policies that determine when students take particular courses can have important consequences for achievement and subsequent outcomes like advanced course taking. We develop an approach for modeling EOC test performance that disentangles the influence of school and district policies regarding the timing of course taking from other factors. After separating out the timing issue, better measures of the quality of instruction provided by districts, schools and teachers can be obtained. Our approach also offers diagnostic value because it separates out the influence of school and district course-timing policies from other factors that determine student achievement.

We use data from workers in the largest public-sector occupation in the United States -- teaching -- to examine the effect of pension enhancements on employee retention. Specifically, we study a 1999 enhancement to the benefit formula for public school teachers in St. Louis that resulted in an immediate and dramatic increase in their incentives to remain in covered employment. To identify the effect of the enhancement on teacher retention, we leverage the fact that the strength of the incentive increase varied across the workforce depending on how far teachers were from retirement eligibility when it was enacted. Although we document substantial differences across teachers in how their retention incentives were affected by the enhancement, our results indicate that these differences did not translate into meaningful changes in behavior. The following are appended: (1) Pension-Wealth Calculation Details; (2) Supplementary Tables; and (3) Using a Cost-Benefit Framework to Gain Insight about Novice Teachers.

This report examines teacher pension plans in Missouri, with a particular focus on the Kansas City and Saint Louis school districts. Missouri is unusual in that public educators are divided among three pension systems: the Kansas City Public School Retirement System (KC), which covers 3 percent of Missouri teachers; the Public School Retirement System of the City of St. Louis (STL), which covers 4 percent; and the state Public Service Retirement System (PSRS), which covers the remaining 93 percent of teachers. Kansas City and Saint Louis teachers are enrolled in Social Security, while teachers in the larger state system are not. There is no reciprocity between the systems, which means that teachers lose employer contributions if they change systems. Costs have risen sharply over the last decade in the STL and PSRS plans. They will begin rising in the KC plan in 2014. Due to additional notable features of the pension landscape for public educators in Missouri, the authors find that the maintenance of separate pension plans for Kansas City and Saint Louis teachers represents a costly barrier to school improvement that needlessly balkanizes the market for educators in the two metropolitan areas. Therefore they recommend a reform agenda for the pension plans that includes six specific elements. [For the erratum to this report, see ED603522.]

In "Missouri Charter Schools and Teacher Pension Plans: How Well Do Existing Pension Plans Serve Charter and Urban Teachers?" the authors stated that there is no reciprocity between the three Missouri teacher pension plans, based on their understanding that employer contributions could not transfer between plans. That statement is correct concerning the Missouri Public School Retirement System (PSRS) and the Public School Retirement System of the City of St. Louis (STL). However, since 2008 there has been in place a reciprocity agreement between PSRS and the Kansas City Public School Retirement System (KC), and since 2003 between KC and STL, both of which would permit some access to employer contributions. The purpose of this correction is to clarify how reciprocity works in Kansas City, focusing on the more empirically relevant issue of reciprocity between PSRS to KC. [For the full report, see ED603519.]