The Public Pension Story Your Weren’t Reading About (Until Recently)
There’s a lot of talk about the sorry state of pensions in the America, both the increasing lack of defined-benefit plans and the predicaments of local governments that have made pension promises more generous than they can afford.
But according to the Hoover Institution’s Koret Task Force on K-12 Education and fellow (and former federal edu-crat) Williamson M. Evers, the most undercovered important story on public education was … pensions. Teachers’ pensions, to be exact. As the task force explains:
Public education faces its own fiscal cliff as baby boomers retire from the classroom. Decades of severe underfunding have put teacher pension funds in far worse jeopardy than reported by the media because the figures reported by states are premised on unwarranted, rosy assumptions. To cover their true costs, states and districts will need to find hundreds of billions of dollars that might have gone toward a better teacher salary structure, including extra compensation for high performers.
Whether by accident or design, the task force’s observation was made public the same day that the National Council on Teacher Quality released a 72-page report explaining “how teacher pension systems are failing both teachers and taxpayers.” The quick takeaway is that the U.S. has $390 billion in unfunded pension liabilities for teachers. California’s schools lead the pack with $57 billion in debt, perhaps no surprise given the state’s population and fiscal ineptitude, although Illinois is considered in the worst shape on this particular issue. New York, meanwhile, is listed as having no unfunded liabilities, something that makes it unique.