Teacher pension website identifies flaws in WalletHub methodology

TeacherPensions.org has a great explanation of why treatment of teacher pensions in WalletHub’s “Best and Worst States for Teachers” ranking is problematic. Max Marchitello writes,

But WalletHub’s rankings shouldn’t be taken at face value. And, as with any aggregate state ranking, the devil is in the details. About 14 percent of their total Job Opportunity & Completion Rank is based on the cost-adjusted “average” teacher pension in each state.

That’s a big problem. Averages can easily distort what’s actually going on.

Evaluating teacher retirement systems based on the average pension is misleading, because the majority of teachers do not even receive a pension. In Washington, D.C., for example, the average teacher pension is extremely high at almost $65,000, but only 29 percent of teachers ever qualify for a pension. So rating D.C.’s pension system on the average benefit of those who remain misrepresents the retirement realities teachers face. Simply put, a state’s average pension value does not provide much useful information about the quality of teachers’ retirement.

Marchitello points out that vesting rates, portability, and financial stability are much better measures of the health of teacher pension systems.

Terry Stoops / Vice President for Research and Director of Education Studies

Terry Stoops is the Vice President for Research and Director of Education Studies at the John Locke Foundation. Before joining the Locke Foundation, he worked as the progra...

Reader Comments