An Introduction to Teacher Retirement Benefits

2010 ◽  
Vol 5 (4) ◽  
pp. 402-437 ◽  
Author(s):  
Janet S. Hansen
Keyword(s):  
Private Sector ◽  
Pension Plans ◽  
Defined Benefit ◽  
Defined Contribution ◽  
Public And Private ◽  
Teacher Shortages ◽  
Retirement Benefits ◽  
Teacher Retirement ◽  
State And Local ◽  
Public And Private Sector

Like most other state and local government employees, teachers participate primarily in defined benefit pension plans whose benefits are largely based on final average salaries and length of service. Such pensions have been replaced in many private sector firms by defined contribution pensions. A number of questions have arisen about the feasibility and desirability of continuing to rely on defined benefit pensions for teachers. This article provides a brief history of teacher pensions and an overview of teacher retirement benefits today, including differences in the legal and economic context for public and private sector pensions that are important considerations in plan design. It then introduces issues related to financial sustainability, teacher mobility, and teacher shortages. The article concludes with an overview of key differences between traditional defined benefit and defined contribution plans and raises the possibility of adopting a “hybrid” kind of plan that includes features from both kinds of traditional plans.

scholarly journals Behavioral economics perspectives on public sector pension plans

2011 ◽  
Vol 10 (2) ◽  
pp. 315-336 ◽  
Author(s):  
JOHN BESHEARS ◽  
JAMES J. CHOI ◽  
DAVID LAIBSON ◽  
BRIGITTE C. MADRIAN
Keyword(s):  
Public Sector ◽  
Private Sector ◽  
Pension Plan ◽  
Pension Plans ◽  
Defined Benefit ◽  
Defined Contribution ◽  
Public And Private ◽  
Savings Behavior ◽  
The Public ◽  
Public And Private Sector

AbstractWe describe the pension plan features of the states and the largest cities and counties in the U.S. Unlike in the private sector, defined benefit (DB) pensions are still the norm in the public sector. However, a few jurisdictions have shifted toward defined contribution (DC) plans as their primary savings plan, and fiscal pressures are likely to generate more movement in this direction. Holding fixed a public employee's work and salary history, we show that DB retirement income replacement ratios vary greatly across jurisdictions. This creates large variation in workers’ need to save for retirement in other accounts. There is also substantial heterogeneity across jurisdictions in the savings generated in primary DC plans because of differences in the level of mandatory employer and employee contributions. One notable difference between public and private sector DC plans is that public sector primary DC plans are characterized by required employee or employer contributions (or both), whereas private sector plans largely feature voluntary employee contributions that are supplemented by an employer match. We conclude by applying lessons from savings behavior in private sector savings plans to the design of public sector plans.

Transitions from career employment among public- and private-sector workers

2019 ◽  
Vol 18 (04) ◽  
pp. 529-548 ◽  
Author(s):  
Joseph F. Quinn ◽  
Kevin E. Cahill ◽  
Michael D. Giandrea
Keyword(s):  
Public Sector ◽  
Private Sector ◽  
Pension Plans ◽  
Full Time ◽  
Defined Benefit ◽  
Defined Contribution ◽  
Private And Public ◽  
Public And Private Sector ◽  
Career Employment ◽  
Public Sector Workers

AbstractDo the retirement patterns of public-sector workers differ from those in the private sector? The latter typically face a retirement landscape with exposure to market uncertainties through defined-contribution pension plans and private saving. Public-sector workers, in contrast, are often covered by defined-benefit pension plans that encourage retirement at relatively young ages and offer financial security at older ages. We examine how private- and public-sector workers transition from full-time career employment, with a focus on the importance of gradual retirement. To our surprise, we find that the prevalence of continued work after career employment, predominantly on bridge jobs with new employers, is very similar in the two sectors, a result with important implications in a rapidly aging society.

Retirement and Pensions in American Economic History

2018 ◽  
pp. 354-374
Author(s):  
Robert Clark ◽  
Lee A. Craig
Keyword(s):  
Public Sector ◽  
Private Sector ◽  
Economic History ◽  
Pension Plans ◽  
Federal State ◽  
Defined Benefit ◽  
Retirement Plans ◽  
The Us ◽  
Defined Benefit Plans ◽  
State And Local

The proportion of the US population that survives to retirement age has increased over time, as has the share of the older population that retires. Higher incomes at older ages explain the increase in the incidence of retirement. Pensions provide much of that income. In general, public-sector workers, especially military personnel, were covered by pensions before their private-sector counterparts, and coverage in the public sector remains more widespread, and generous, than it is in the private sector. Public-sector pension plans are more likely to be defined benefit plans than are private-sector plans. Many public-sector employers have promised their employees more in benefits than they have set aside to pay for those benefits. Estimates suggest that the federal, state, and local retirement plans currently in operation are underfunded by as much as $5 trillion.

Employee Welfare Measures in Public and Private Sectors

2015 ◽  
Vol 6 (1) ◽  
pp. 22-36 ◽  
Author(s):  
Chandra Sekhar Patro
Keyword(s):  
Private Sector ◽  
High Performance ◽  
Public And Private ◽  
Retirement Benefits ◽  
Educational Benefits ◽  
The Public ◽  
Employee Welfare ◽  
Welfare Measures ◽  
Private Sector Organizations ◽  
Public And Private Sector

Employees' play a key role in the existence and growth of any organisation, therefore their welfare is essential. During the past few years, both public sector and private sector organisations have been contributing towards the employee's benefits and also increase their efficiency. Employees' welfare facilities include housing facilities, free medical facilities, retirement benefits, children and adult educational benefits, welfare measures for the employee's families, loan facilities, etc. If the organisations do not bother about the employees benefit, but expect efficient and high performance from them, it is a mere waste. So there is utmost need for the employee's welfare in any type of organisation. Organizations have to provide welfare facilities to their employees to keep their motivation levels high. A comparative study was undertaken to know the satisfaction level of the employees on the enforceability of various welfare measures in both the public and private sector organizations. The study also throws light on impact of welfare measures on the employees' performance.

scholarly journals Asset management in public DB and non-DB Pension Plans

2015 ◽  
Vol 15 (4) ◽  
pp. 379-406 ◽  
Author(s):  
JAMES FARRELL ◽  
DANIEL SHOAG
Keyword(s):  
Asset Management ◽  
Nationwide Survey ◽  
Pension Plans ◽  
Individual Investors ◽  
Defined Benefit ◽  
Defined Contribution ◽  
Data Set ◽  
Management Fees ◽  
Asset Class ◽  
State And Local

AbstractState and local pension plans are increasingly moving from the traditional defined benefit (DB) model to non-DB models that generally allow for participant-directed investment. This shift has important implications for the management of the more than US$3 trillion in assets held to finance public employee retirement benefits. To investigate these implications, we introduce new data from a nationwide survey of public DB and non-DB plans and a unique data set on thousands of individual investors in the state of Florida's defined contribution (DC) plan. Using these sources, we explore how participant involvement in the public sector affects the distribution of asset class allocations, management fees, investment outcomes, and portfolio rebalancing at both the individual and aggregate levels. We found that there is little difference between the DB and non-DB plans in terms of asset mix, returns, and fees, except that DB plan have greater access and allocations to alternative investments. We also found that while the average individual DC plan participant allocated their asset similarly to the DB plan, black females and older white males, on average, invested on opposite tails of the risk spectrum.

Missing Participants and Beneficiaries From Private-Sector Pension Plans

2021 ◽  
pp. 088636872110451
Author(s):  
John G. Kilgour
Keyword(s):  
Pension Plan ◽  
The United States ◽  
Pension Plans ◽  
Pension Benefit ◽  
Defined Benefit ◽  
Defined Contribution ◽  
Social Security Administration ◽  
Retirement Benefits ◽  
Department Of Labor ◽  
For Profit

This article examines the problem of missing and nonresponsive participants and beneficiaries from defined-benefit (DB) and especially defined-contribution (DC) pension plans, mainly in the private (for profit) sector of the United States. It focuses on the current search requirements of the three government agencies involved in finding missing participants and beneficiaries: the Pension Benefit Guaranty Corporation (PBGC), the Department of Labor (DOL) and its Employee Benefit Services Administration (EBSA), and the Internal Revenue Service (IRS). The article also reviews the efforts of the Social Security Administration (SSA) in this area. It then reviews proposed legislation, the Retirement Savings Lost and Found Act of 2020 (now S. 1730; RSLFA). The issue of missing participants and beneficiaries often becomes critical when an employer goes out of business or for some other reason stops sponsoring a pension plan. The missing participants are owed their earned retirement benefits. They, not the employer, own them.

Pension and Health Benefits for Public-Sector Workers

2013 ◽  
Author(s):  
Lee A. Craig
Keyword(s):  
United States ◽  
Public Sector ◽  
Private Sector ◽  
Health Benefits ◽  
The United States ◽  
Pension Plans ◽  
Federal State ◽  
Defined Benefit ◽  
State And Local ◽  
Public Sector Workers

In the United States, retirement and health benefits make up a substantial proportion of the total compensation of public-sector workers. This chapter explores the history and the main characteristics of such retirement and health benefits, as they have developed in the United States. As shown, on average, these benefits tend to be more valuable than those provided to private-sector workers. Public-sector workers are more likely than their private-sector counterparts to be covered by a retirement plan and by employer-provided health insurance. Public-sector pension plans are more likely to be defined benefit plans than are private-sector plans. Many public-sector employers have promised their employees more in benefits than they have set aside to pay for those benefits. Estimates suggest that the 2,670 federal, state, and local retirement plans currently in operation are underfunded collectively by as much as $5 trillion, and public-sector health plans are probably underfunded by roughly $1 trillion.

Case Study

1998 ◽  
Vol 30 (6) ◽  
pp. 25-31 ◽  
Author(s):  
Harold W. Burlingame ◽  
Michael J. Gulotta
Keyword(s):  
Pension Plan ◽  
Pension Plans ◽  
Defined Benefit ◽  
Corporate America ◽  
Defined Contribution ◽  
Cash Balance ◽  
Retirement Benefits ◽  
Strategic Objectives

The potential for using a cash balance pension plan as a restructuring tool is one reason it is gaining favor throughout corporate America. Another reason is that it can give employees a better understanding and appreciation of their retirement benefits. Both reasons are important at a time when companies are changing rapidly and sometimes downsizing and when employees are less likely to stay in one place long enough to anticipate reaping the rewards of a defined bene-fit plan. Cash balance plans combine some of the best features of defined contribution (DC) and defined benefit (DB) plans. For employers, they provide more flexibility than traditional DB plans and help companies achieve their strategic objectives. For employees, they better meet the needs of a changing workforce by delivering portable, easily understood benefits. Since 1985, more than 200 companies have replaced their DB pension plans with a cash bal-ance design. One of the newest and most enthu-siastic proponents is AT&T, which, with the help of consulting firm ASA, Inc., designed a cash bal-. ance plan to help meet its restructuring goals.

scholarly journals Wage Differentials Between The Public And The Private Sector: How Comparable Are The Workers?

2011 ◽  
Vol 4 (5) ◽  
Author(s):  
Josefa Ramoni-Perazzi ◽  
Don Bellante
Keyword(s):  
Private Sector ◽  
Wage Differentials ◽  
Font Size ◽  
Matching Method ◽  
Step Method ◽  
Public And Private ◽  
The Public ◽  
Normal Text ◽  
State And Local ◽  
Public And Private Sector

<p class="Normal1" style="text-align: justify; line-height: normal; text-indent: 0in; margin: 0in 34.2pt 0pt 0.5in;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; color: black; font-size: 10pt; mso-bidi-font-style: italic;">This paper&rsquo;s purpose is to examine the importance of controlling for the comparability of the units in a sample when examining wage differentials of various types. We use U.S. CPS data for the period 1992-2000 to compare estimated wage differentials between public and private sector workers obtained using two different methodologies: Lee&rsquo;s two-step method that controls for the selection bias resulting from the non-randomness of the sample, and the propensity score matching method that controls also for the comparability of the workers. Lee&rsquo;s method suggests that federal workers are paid a premium, while state and local workers are underpaid compared to private sector workers. However the matching method indicates that this data is too heterogeneous to be used to compare wages across sectors. We conclude that, when the outcome under study is not only affected by some sort of selection but also requires comparable groups, the traditional methodology may not be enough. </span></p>

Sign in / Sign up

Export Citation Format

Share Document