Retirement insights from a Colorado PERA perspective

Issues & Perspectives

Pensions a Valuable Tool in Efforts to Solve Teacher Shortages

A teacher stands in front of a chalkboard and points to a room full of students with their hands up
Photo credit: Wavebreakmedia/Getty Images

Two years into the COVID-19 pandemic, school districts across the country are facing serious shortages of qualified teachers and other staff, and those shortages have led to widespread concern.

In a recent survey from the National Institute on Retirement Security (NIRS), 84 percent of people surveyed said they’re worried about shortages of teachers and school staff, and 81 percent said they’re worried about people leaving the profession.

The educator shortage was the topic of a recent forum held by the Public Education and Business Coalition (PEBC), a Denver-based organization that works with school districts, teachers and business leaders across the country to improve public education. Colorado PERA was a sponsor of PEBC’s Colorado Education Workforce Forum.

At the forum, state education officials, district superintendents and business leaders came together to discuss the sobering reality of Colorado’s educator shortage and brainstorm solutions.

Image credit: Public Education and Business Coalition

In the 2020-2021 school year, there were nearly 7,000 teaching positions to fill in Colorado, but only about 3,000 graduates from teaching programs, according to PEBC. In addition, school districts across the state are dealing with a 16 percent turnover rate and per-student funding that’s well below the national average.

Teacher pay is a major factor in discussions about shortages, and so are benefits — particularly retirement benefits. In the NIRS survey, 90 percent of respondents agreed that teachers and school staff should have access to a pension for retirement security, and 94 percent agreed that elected officials should ensure those pensions are adequately funded.

The role of Colorado PERA in attracting and retaining teachers

Decades ago, it was common for many workers to receive a defined benefit (DB) retirement plan — also known as a pension — from their employer. Today, public employees like teachers and other school employees are among the few who still have access to DB plans. Most other workers have to rely on defined contribution (DC) plans like 401(k)s to save for retirement.

Related: States Consider Reviving Closed Pensions in Effort to Recruit, Retain Public Workers

PERA’s hybrid defined benefit plan is a particularly strong recruitment and retention tool because of the value it offers to employees regardless of the length of their career. PERA’s plan design has evolved to serve both long-service employees as well as those who only work for a short time in public employment. For example, every dollar a PERA member contributes to their account is theirs, and they can take those funds with them when they leave PERA-covered employment. This plan design benefits Colorado’s public employees, their employers and the valuable services delivered to Colorado taxpayers.

In the 2022 legislative session that just wrapped up in May, Colorado lawmakers tackled the issue of educator shortages with a number of bills to increase public school funding. They also passed two bills that allow some PERA retirees to return to work in school districts dealing with critical shortages.

Solving the teacher shortage in Colorado and elsewhere will require creativity and commitment, and Colorado PERA remains a valuable tool for school districts looking to hire and keep qualified educators.

Defined benefitAlso known as a pension, this is a type of pooled retirement plan in which the plan promises to pay a lifetime benefit to the employee at retirement. The plan manages investments on behalf of members, and the retirement benefit is based on factors such as age at retirement, years of employment and salary history.Defined contributionA type of individual retirement plan in which an employee saves a portion of each paycheck (along with a potential employer match) and invests that money. The employee’s retirement benefit is based on their account balance at retirement. A 401(k) is a type of defined contribution plan.


  1. ramona says:

    So, can a retired teacher return to the classroom full time having signed a contract with a district and not have to put their retirement on hold? This would be a great idea.

    • PERA On The Issues says:

      Hi Ramona, PERA retirees are able to work in retirement for a PERA employer without affecting their benefit if they work less than 110 days/720 hours in a calendar year. There are also provisions allowing retirees in certain districts and in certain positions to work in excess of the limit, along with substitute teachers, following the passage of HB22-1057. Please check with your employer to see if it qualifies for these special provisions. You may also call us at 800-759-7372 and we’d be happy to answer any additional questions specific to your situation.

    • Greg says:

      Under the new law, it is my understanding that you can now work unlimited hours as a substitute teacher without losing your retirement benefits.

  2. CC says:

    Retired teachers who substitute or otherwise work for a PERA employer after retirement still need to contribute 10.5% to PERA, with no return/individual benefit of that contribution in any form, correct?

    • SShipley says:

      Yes correct!!

    • PERA On The Issues says:

      You’re correct that all retirees working after retirement must pay a working retiree contribution to PERA equal to the member contribution rate, and those contributions do not accrue an additional benefit. However, a retiree can choose to suspend their retirement and work for a PERA-covered employer without limits, as well as earn an additional benefit segment with those contributions.

      • Barry says:

        Suspending retirement would only shorten the number of years you could collect your pension, (unless a lump sum of suspended payments awaits you after the suspended time.)

      • Greg says:

        A retiree, from my understanding, can now work unlimited hours as a substitute teacher without losing any retirement benefits.

        • PERA On The Issues says:

          Hi Greg, HB22-1057, which was signed into law earlier this year, temporarily waives working after retirement limits for qualified service retirees working as substitute teachers in any school district while there are critical substitute teacher shortages. A retiree wishing to return to work can check with their district about whether they qualify. A retiree can also choose to suspend their retirement to return to work without restrictions.

    • Paula says:

      Yes …. It’s correct.
      They garnish your wage, and you pay state and federal tax, and even though there is a major shortage of both subs and teachers, your work, will net you very close to minimum wage in most districts, with no positive impact on your retirement income. It’s astonishing really.

  3. Pat says:

    The 2022 legislative session did not tackle the educator shortage. They put a band aid on it! The day of reckoning is coming soon.

  4. Linda Kunhart says:

    You state PERA is beneficial to both long and short term employees. While this is true, if you work more years outside of PERA and then have short term PERA employment, social security will take away most of your earned social security.

  5. dora jaramillo says:

    Teachers have supported the Unions decisions and went along in their liberal ideas that they along with school board members that don’t care about our children have destroyed our school system for power. Now we
    are seeing the results of the past. I myself went into teaching but early while
    doing substitute teaching I saw the destruction coming and got out teaching.

  6. Cecil+Stushnoff says:

    Teaching is a hallmark of our future, we must do whatever possible to encourage talented teachers.

  7. Rosemary Fabec says:

    We should concentrate on improving the education level of teachers especially at the high school level. When a physics or calculas teacher does not thoroughly know their subject all shareholders suffer. We need to improve the educator colleges. Who agree?

    • EG says:

      With a 50% dropout rate for Colorado Public Schools, most students will never take these courses. The system is designed to fail.

  8. John G says:

    I’m scratching my head wondering how PERA retirement benefits are attractive when the COLA is so very eaten up by inflation. It appears that having a PERA retirement is a reason to not hire on here…. ???

    • Paula says:

      Have to agree. The last 12 years, a qualified teacher would, (or should) look at PERA as something very different than a pension. The value of the dollars paid continues to erode, trapping the professional in a dwindling income in relation to cost of living. Professional Unions need to lobby for adequate wage while working, allowing the professional to manage their own retirement fund, and be able to collect SS, from additional employment if the contributions meet the minimum.
      Most of us could easily have invested (assuming fair, professional wage, throughout the career.) Instead, we worked for barely 1/3 the salary of similarly qualified professionals, with the promise (and expectation) of having deferred earnings in the form of a living pension, that trends to keep up with cost of living. PERA, and the legislature have dropped that ball. Breach of contract for the guaranteed annual increase of 3.5% has resulted in a rapidly declining benefit with the passing of time.
      Talented teachers would do well to steer clear of that kind of arbitrarily, (even retroactively) changeable terms of deferred compensation. In 12 years the breach of contract has cost retirees like me close to 60K due to loss of Annual Increase and compounding.

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