This issue brief analyzes the effectiveness of pensions on teacher retention and productivity. It finds that pensions play a critical role in recruiting and retaining highly productive teachers.

As a result, pensions help increase schools’ effectiveness, which benefits students. Additionally, DB pensions save school districts money by reducing expensive teacher turnover costs. These findings are contained in a new research brief, Revisiting the Three Rs of Teacher Retirement Systems: Recruitment, Retention and Retirement.

The new research brief finds that:

• Teacher effectiveness increases with experience. Thus, the more retention that we see among midcareer teachers, the more that the average productivity within a school will increase.
• The cost of teacher turnover is quite high, both in terms of financial cost and loss of productivity to the school district.
• Defined benefit pension plans help to recruit high quality teachers, and to retain highly productive teachers longer, as compared with defined contribution (DC) accounts.
• In 2009, DB pensions helped to retain an additional 30,000 teachers nationwide. Because longer tenured teachers are more effective teachers, the increased retention that DB pensions bring increases the overall quality of public education.
• Because the cost of teacher turnover is substantial, the retention effects of DB pension plans also save school districts money. In 2009, DB pensions saved school districts between $131 million and $284 million nationally in teacher turnover costs.