US How generous are teacher benefits and do they make up for lower pay?

20:45  16 may  2018
20:45  16 may  2018 Source:

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Many people assume that an "expensive" retirement plans must obviously translate into generous benefits for workers, but that's not always true. Actuaries make some assumptions about how much those benefits will be worth in the future and how much is needed to save today in order to pay for

It is often assumed that the generosity of teachers ' retirement benefits more than makes up for the poor pay and is the public-school teacher 's ultimate financial reward. To be sure, a teacher who works in the same school system for three to four decades will receive a generous retirement benefit .

Teachers are public employees and generally receive pension and insurance benefits (medical, dental, vision) that cover themselves and their families. But are these benefits overly generous? Do the benefits make up for lower pay?

"I wouldn’t necessarily say it’s generous, it’s way better than having nothing," said Tyson Gardin of Fort Mill, S.C., a physical education health teacher. "It’s not something I can complain about because there are people that don’t have anything."

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compare teachers and other public-sector workers with private-sector workers who might be expected to have lower salaries or less- generous benefits . This is the best estimate of how much employers need to contribute today to pay for future benefits . The measure preferred by Richwine and Biggs

The rest have to figure out whether they ’re covered by Social Security, how to make up for years of low savings rates for the pension fund by the Teacher pay and benefits have made headlines over the past few weeks, with walkouts and strikes by teachers in Kentucky, Oklahoma, and West Virginia.

"You get a state plan but it comes out of your check, it’s not something that’s free," he added.

Recent teacher rallies and strikes in Arizona, Colorado, Kentucky, Oklahoma and West Virginia have put a spotlight on teacher pay and benefits.

a group of people standing in front of a sign: Melissa Knight, who teaches art at Ardmore, Okla., middle school, holds a sign as teachers rally against low school funding at the state Capitol in Oklahoma City, on April 2, 2018.© Sue Ogrocki, AP Melissa Knight, who teaches art at Ardmore, Okla., middle school, holds a sign as teachers rally against low school funding at the state Capitol in Oklahoma City, on April 2, 2018.

These are some of the issues surrounding benefits and what teachers have to say about them:


The vast majority of public school teachers are eligible for defined benefit plans where the state promises a guaranteed payout for life upon retirement based on length of service and earnings history. Generally, both the employer and employee make contributions and the state is responsible for investing the money to fund the pensions.

Do teachers' benefits make up for lower pay?

  Do teachers' benefits make up for lower pay? One argument is that despite pay that is lower than similarly skilled professions, teachers receive much more generous benefits than many other professions. Is that true?Load Error

PFM reports teachers also get a "comparatively generous overall benefit ." The promised benefits , many say, are why they took a lower paying job. Some Kentucky public retirees earn six-figure retirement benefits , but they make up a small percentage of all retirees. How is a typical Kentucky pension benefit calculated?

I know my teacher is paid £15 so if I offer him £20, we can both benefit .” You can’t really fault the logic. How will you price your classes? Have a sliding scale pricing system in which stu-dents pay a lower hourly rate if they sign up for longer.

The traditional defined benefit pension can be quite generous for teachers who have put in many years of service since the payout grows larger with time.

a group of people holding a sign posing for the camera: The average salary for a public school teacher was $59,850 during the 2016-2017 academic year.Teachers have gone on strike in West Virginia, Oklahoma, and Kentucky to encourage salary increases.The average teacher salary has dropped the most in Colorado, where educators earn 15% less than they did about 20 years ago when adjusted for inflation. Teachers across the US want a raise. And in some states - West Virginia, Oklahoma, and Kentucky - they're walking out of the classroom to demand it.  Nationwide, the average public school teacher salary for the 2016-2017 school year was $59,850. While the nominal teacher salary has increased, when adjusted for inflation, average salary has dropped over time -about 1.6% lower than the $41,407 average in the 1999-2000 school year. In February, West Virginia's public school teachers went on strike to protest the 1% and 2% salary increases scheduled over the next few years. After nine days, state legislators approved a 5% raise.  The West Virginia teacher walkout has encouraged other states to follow suit. (Technically, these are called Teachers have gone on strike in West Virginia, Oklahoma, and Kentucky — this is how much money teachers make in every state

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But many state pension plans are underfunded and a push for pension reform has attempted to address this issue by modifying the plans. The modifications include lowering benefits for new hires, increasing employee contributions and reducing cost of living adjustments for retirees.

"Pension costs have been shifted to the individual," said American Federation of Teachers president Randi Weingarten, as teachers are being required to increase contributions to their pension program.

More: What is the average teacher pension in my state?

More: Defined benefit plans vs. Defined contribution plans

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Reducing teacher compensation, especially overly generous benefits , could help to balance budgets today and to free up resources in the future. [4]Jay P. Greene and Marcus A. Winters, “ How Much Are Public School Teachers Paid ?” Manhattan Institute Civic Report No. 50, January 2007, at http

How do the schools offer "tax-free" salaries? Technically, all US citizens must pay taxes while We also provide a generous relocation allowance for belongings based on a volume shipment from In general , teachers working in Japan pay a lower percentage of tax than they would if working in the

A smaller number of states offer defined contribution plans, similar to 401(k)s, that do not guarantee a set payout. Instead, employers and employees contribute money to an account that the individual is responsible for investing to fund their retirement.

Social Security

Complicating the retirement savings picture, about 40% of public school teachers, or more than 1 million, are not covered by Social Security, according to Bellwether Education Partners, a nonprofit education organization.

Social Security originally only covered private workers, but in the 1950s, Congress allowed states to extend coverage to its workers. Some states opted out of enrolling their workers and instead relied on pension plans with more generous payout formulas, according to, a  project of Bellwether Education Partners.

Most teachers in these 15 states and the District of Columbia do not pay into the Social Security system and do not receive benefits, says: Alaska, California, Colorado, Connecticut, Georgia, Illinois, Kentucky, Louisiana, Maine, Massachusetts, Missouri, Nevada, Ohio, Rhode Island, and Texas.

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Pay . If you need to make a little money on top of your teacher salary, coaching may be the answer. References (4). Coach U: The Benefits of Becoming a Coach. [Degree Make ] | How Much Do Teachers With a Master's Degree Make ?

Teachers accept their lower -than-average professional pay because they anticipate receiving that defined benefit pension. Teachers put up with crap pay and state governments making new, unfunded, mandates every year, and a new generation of parents that believes it’s always the

More: Here's how teachers can ace retirement without Social Security

Some teacher organizations argue that pension plans are not working for teachers and leave too many unprotected.  estimates "that half of all Americans who teach in public schools won’t qualify for even a minimal pension benefit, and less than one in five will remain long enough to earn a normal retirement benefit."

The study recommends enrolling all teachers into the Social Security system to provide a level of retirement protection that is portable.

Health insurance

The average monthly teacher employee contribution for family coverage health care rose from $334.40 in 2010 to $460.16 in 2016, according to the Bureau of Labor Statistics’ National Compensation Survey.

The portion of health insurance premiums public school teachers contribute has risen to 38%.

"Given the cost of health care and the burdens of student debt, the wages are not what people can provide for their families," Weingarten said.

Summers off

Many people consider this perk the best of all: Three months off in the summer.

State requirements vary, but the standard public school year for most school districts is about 180 days, or 9 months.

And many assume teachers get those three months off. But the National Education Association says that only students actually get the whole summer off. They argue that teachers spend summers working second jobs, teaching summer school, and taking classes for certification renewal or to advance their careers.

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Teaching is a profession we usually think of as hard work with low pay , and I would have to agree, but there are some upsides.Let’s look at how much teachers really make . I’ve never heard one teacher say they signed up for the retirement and health insurance.

Only about 20 percent of a CEO's pay is base salary; the rest is made up of incentives based on If you know how well the CEO is compensated, you can get a sense for how generous the For a CEO making million a year, a 5,000 benefit may be inadequate for maintaining a comparable lifestyle.

"As an educator you constantly have to be on top of trends, so it’s not like it’s just six weeks of me laying by the pool,"  said Sara Holloway, a fifth-grade English language arts teacher from Monongahela, Pa.

"You are taking classes in the summer, or you are reading material, or you are conferencing or blogging with other teachers, you are planning for the next year," she said.

Comparing teacher benefits to other professions

Teachers do enjoy more attractive benefit packages than other professionals, a study by the progressive-leaning think tank Economic Policy Institute found. But the EPI analysis also concluded that teachers are still paid less than what workers with similar skills and education levels make even when factoring in benefits.

Public school teachers’ compensation (wages and benefits) were 11% lower than that of comparable workers in 2015, the EPI found. The wage gap increases to 17% when just comparing wages.

More: Crushing student loan debt, stagnant pay can put teachers in financial bind

Other studies, however, claim the wage gap is overstated and that despite salaries lagging in some states, teachers are not dramatically underpaid overall.

"The average teacher already enjoys market-level wages plus retirement benefits vastly exceeding those of private-sector workers," wrote Andrew Biggs, resident scholar at the conservative think tank American Enterprise Institute, and Jason Richwine, a public policy analyst in Washington D.C.

The National Education Association reports that the average public school teacher salary for 2016-17 was $59,660.   But teacher pay varies significantly by state, ranging from a high of $81,902 in New York to a low of $42,925 in Mississippi.

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