Retirement insights from a Colorado PERA perspective

Issues & Perspectives

Pensions Play Critical Role in Recruiting and Retaining Teachers, Research Shows


Traditional pension-type retirement plans play a critical role in recruiting and retaining good teachers and save districts money, according to new research from the National Institute on Retirement Security (NIRS).

In Revisiting the Three Rs of Teacher Retirement Systems: Recruitment, Retention and Retirement, NIRS finds that:

  • Defined benefit (DB) pension plans like Colorado PERA’s hybrid plan help retain teachers, increasing their effectiveness as they become more experienced.
  • The retention effects of DB pension plans save school districts money – between $131 and $284 million nationally in 2009 – through reduced teacher turnover costs.
  • When compared to defined contribution (DC) accounts, DB plans help to recruit high quality teachers and retain highly productive teachers longer.

Multiple examples of research findings across industries and sectors, including but not limited to public school teachers, show that employees highly value pension-type retirement benefits, making them both a strong recruitment and retention tool.

The research brief explains that teacher effectiveness increases with experience, meaning that great teacher retention creates higher overall teacher productivity. Teachers become more effective as they gain experience, with effectiveness increasing sharply within the first three to five years of teaching. The youngest, least experienced teachers have the highest turnover.

The research found that in 2009, DB plans helped to retain 30,000 teachers nationwide. Because the cost of teacher turnover, which includes recruitment, hiring, and orientation, is substantial, the retention effects saved school districts between $130.7 million and $284.4 million nationally in teacher turnover costs.

As the research brief notes, “because DB pensions play an important role in the retention of highly productive teachers, pensions have the dual benefit of both increasing the overall quality of our public education system while also reducing the costs to taxpayers.”

Review a NIRS presentation about the research here.

Defined benefitA mandatory retirement savings plan in which a participant’s future benefits are known or can be calculated, but contributions are subject to adjustments. Defined contributionA voluntary plan in which participants can save pre-tax income for retirement. Contributions are “defined” by the employee, but the future benefit is not guaranteed.


  1. Barry K. Thorpe, MA says:

    How almost unfathomable it is to read that pensions play a part in retention, especially in Colorado, where since 2010 the very notion of a fully vested pension has been rendered virtually meaningless.
    The idea of pension is an inviolable contract that is made, with the understanding that, once fulfilled by the employee, is to be honored by law, ethics, even historically, morals. That has not been the case in Colorado. Retirees, like myself have been stripped of key provisions of the retirement conditions agreed upon. To date, that taking of deferred compensation has amounted in tens of thousands of dollars in lost, earned benefits.

    PERA broke the contract in 2010 with those ALREADY retired, already fully-vested, already at the end of a long and challenging career in the service of Colorado’s children. PERA proposes to FURTHER violate the already gutted COLA provision. They are proposing 0% COLA, in the very same year they have raised insurance by 23.4%. !

    Adjustments to the program, while sometimes necessary, should never reach BACK to those whose good faith obligations have already been met. Not to mention, as the current economic boom in Colorado is undisputed, and negates almost all of the “need” to adjust that was claimed in mid-recession, 2010. No, PERA is at best, an untrustworthy purveyor of any retention incentive related to pension. PERA defrauded fully vested retirees in 2010, and is posed to repeat. A young teacher considering Colorado would be wise to be very suspect of contractual obligations with this organization.

  2. R. Coleman says:

    I fully agree, It sickens me how PERA has systematically gutted the retirement package that I and many other teachers put our faith in. No wonder our schools are finding it difficult to recruit, and retain teachers today. I always advise young people to think twice before becoming an educator. They are considering a profession that does not have a competitive compensation package in conjunction with the outside world, are asked to work towards retirement incentives that are no longer guaranteed by the state, or the retirement association.

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