Kauffman Foundation Research Paper Looks at Missouri Teacher Pension Systems

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From: www.kauffman.org

Recommendations include alternative plans that provide mobile retirement benefits to new teachers

(Kansas City, Mo.) Feb. 25, 2014 – Missouri’s complicated and disconnected educator retirement systems create staffing challenges, particularly for urban school districts.

Reducing unnecessary complexity and making plans more mobile could help the state’s urban districts see greater success in recruiting and retaining effective teachers and leaders, according to a research report released today by the Ewing Marion Kauffman Foundation.

The report, “Missouri Charter Schools and Teacher Pension Plans: How Well Do Existing Pension Plans Serve Charter and Urban Teachers?,” was authored by University of Missouri-Columbia economists, including Michael Podgursky.

Their research found the current structure of pension systems in Kansas City and St. Louis school districts creates a complex and fragmented labor market that exacts a penalty on urban districts and teachers. Difficulties are even more pronounced in recruiting veteran principals and assistant principals to urban schools.

“Several states around the country are attempting to better align their pension systems with teacher interests and labor market realities facing urban districts in particular,” said Aaron North, vice president of Education at the Kauffman Foundation. “With this research, we are questioning how well Missouri’s systems serve urban educators, and seeking to learn if those plans, or different plans, could be made more effective tools for recruiting and retaining teachers in the state’s two urban centers.”

Missouri has three separate teacher pension systems: the Kansas City Public School Retirement System (KC), the Public School Retirement System of the City of St. Louis (STL) and the Missouri Public School Retirement System (PSRS).

The KC and STL retirement systems cover employees of district and charter schools in those two districts only, while the statewide PSRS system covers all of the state’s other school districts.

State data presented in the report show that within eight years of starting employment in either the KC or STL retirement systems, between 80 percent and 90 percent of teachers in either district or charter schools have left the systems.

The report also notes that, although charter schools represent 30 percent to 40 percent of student enrollment in the two urban districts, charter schools are not represented on either the KC or STL pension boards.

The Kauffman report questions whether the existing pension plan structure is well-suited for new teachers entering any of Missouri’s three systems.

The report calls for consideration of alternative pension plans for new teachers that would be more cost effective, provide mobile benefits, and provide a more secure and reliable retirement option for all educators, not just those working in the plans for the longest periods of time.

Other recommendations include increased transparency in all plans and ensuring charter schools have representation on the KC and STL pension boards.

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