Cutting Benefits May Reduce Quality of Teachers

January 25, 2013 ( – Many public teacher retirement systems have made decisions following the economic downturn to cut pension benefits, but research indicates this is a costly decision.

Researchers for the Center for Retirement Research at Boston College found that, controlling for demands of the job and personal characteristics, state and local teacher plans that compensate teachers more generously are able to hire higher quality teachersas measured by the SAT score at their undergraduate institution.The researchers pointed out that since cuts for current employees are precluded under the laws of many states, most of the cuts fall on new hires.   

The researchers are not arguing against restructuring pensions, but that pensions are a part of a total compensation package.  So even if the pension changes are good policy, without compensating wage increases or other benefits, they will diminish the total compensation that new teachers will receive, making teaching in public schools less attractive and reducing the quality of applicants.  

The research paper can be downloaded from