Teachers' pensions under pressure |
Unfunded liabilities at K-12 pension plans topped $816bn in 2022, according to figures prepared for Education Week by the Equable Institute nonprofit, with much variation among individual states and providers. Unfunded pension liabilities arise when money in the pension bank account falls short of what the fund has committed to paying the employees who access it and Equable’s report paints a bleak picture. The $816bn figure for 2022 exceeds the annual amount America collectively spends each year on K-12 public education. Nationwide, teacher pension plans were 75.7% fully funded in 2022, marking a drop of more than 8 percentage points from the year prior. In two states and the District of Columbia, public pensions - most of which are for school employees - are funded at more than 100% of existing liabilities. In 20 more states, public pensions are 80% funded or better. In six states however - Connecticut, Illinois, Kentucky, Mississippi, New Jersey, and South Carolina - pensions are funded between 47% and 59%. More specifically, three pension plans that cover teachers are among the 15 lowest-funded public pension plans in the nation. Chicago Teachers Fund is 45% funded with $14bn in unfunded liabilities, the New Jersey Teachers Pension Annuity is 37% funded with $47bn in unfunded liabilities, while the Indiana Teachers Pre-96 Plan is just 28% funded with $10bn in unfunded liabilities. Anthony Randazzo, executive director of Equable, warns that a potential recession and the oncoming expiration of the federal COVID relief funds that have helped keep many districts afloat during the pandemic could create even steeper financial pressures on K-12 pensions in the coming years.