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Equable Original
RELEASE: CT’s Teacher Pension Financing Reinforces Inequity
FOR IMMEDIATE RELEASE
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November 14, 2024 —Equable Institute has released a report highlighting how Connecticut’s funding of teacher pension obligations favors wealthier, less diverse, and higher-performing public school districts. Although teacher benefits are largely based upon the salaries that local districts individually set, the local districts do not pay the employer portion of teacher pension contributions. Instead, the State of Connecticut, directly subsidizes their compensation costs by sending money to the Connecticut Teachers Retirement System (TRS) on behalf of school employers.
By looking at each public school district’s pension obligations, and dividing them by student enrollment figures, the report illustrates how inequitably the state allocates its funds when it makes annual contributions to TRS. The report calls this equity metric the Per Pupil Pension Subsidy.
“Connecticut’s system of financing teacher pensions creates a competitive downside for disadvantaged districts,”noted Anthony Randazzo, Executive Director of Equable Institute. “In this case, the problem isn’t the unfunded liabilities of the pension plan, the problem is that the funding model that the state uses to pay for pension benefits and unfunded liabilities is compounding inequities by impeding the ability of the highest need districts to recruit and retain effective teachers.”
Among the key findings in the new report are that:
- Districts with smaller pension obligations are likely to have a high percentage of their workforce getting paid lower salaries—at or below $60,000.
- Connecticut pays Per Pupil Pension Subsidies at less than half the rate for students from low-income families as compared to their peers.
- Connecticut pays Per Pupil Pension Subsidies at less than half the rate for students of color as compared to white students.
- Connecticut pays a 28% larger Per Pupil Pension Subsidy on behalf of teachers in high-performing districts than for districts with lower academic performance.
- “State-financed teacher pensions account for over a quarter of Connecticut’s overall K-12 education budget each year,” Randazzo explained. “This report exposes a hidden example of educational resource inequity: By subsidizing differences in compensation between districts, the state is reinforcing unequal educational opportunities between its towns.
“A way to fix this would be asking districts who are able to compensate educators at the very top of the payscale to contribute a portion of the normal cost of pension benefits that they themselves generate. This would ensure that TRS continues to receive appropriate funding while more equitably distributing how payments are made. There are a range of ways the state-level savings could be used, such as further investing in Connecticut’s Education Cost Sharing formula.”
Equable Institute’s full report can be read here.
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