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“But the Pension Fund Was Just SITTING There …”: The Politics of Teacher Retirement Plans


  • Frederick M. Hess

    () (American Enterprise Institute, Washington, DC)

  • Juliet P. Squire

    () (American Enterprise Institute, Washington, DC)


The tension at the heart of pension politics is the incentive to satisfy today's claimants in the here and now at the expense of long-term concerns. Teacher pensions, in particular, pose two challenges. The first is that political incentives invite irresponsible fiscal stewardship, as public officials make outsized short-term commitments to employees. The second is that incentives hinder modernization, as policy makers avoid the politically perilous task of altering plans ill suited to attracting talent in the contemporary labor market. The alignment of the political stars has helped some states and localities to address the first challenge, but far too few have demonstrated a willingness to tackle the second. We illustrate the political dynamics through discussions of pension plans in New Jersey, Oregon, and San Diego, California, and suggest several political strategies that could make pension challenges more tractable and encourage public officials to be responsible fiscal stewards or to revisit anachronistic retirement systems. © 2010 American Education Finance Association

Suggested Citation

  • Frederick M. Hess & Juliet P. Squire, 2010. "“But the Pension Fund Was Just SITTING There …”: The Politics of Teacher Retirement Plans," Education Finance and Policy, MIT Press, vol. 5(4), pages 587-616, October.
  • Handle: RePEc:tpr:edfpol:v:5:y:2010:i:4:p:587-616

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    teacher retirement systems; teacher pension plans;

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies


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