Pension benefits are important for providing retirement security to teachers, but their value goes beyond that. Teacher pay often is lower when compared to others with similar educational credentials, and solid benefits can help close that compensation gap. Additionally, pensions act as magnets for keeping career teachers in the classroom. Pension benefits are accumulated over the course of a worker’s career, with benefits paid out at the end of a career and delivered as reliable monthly income that won’t run out. In contrast, 401(k)-style retirement plans lack that retention effect because there’s not an incentive to stay and earn that dependable monthly check in retirement.
Read Dan Doonan’s Forbes column here.