The myth of great teacher pensions

Opinion editor’s note: Star Tribune Opinion publishes a mix of national and local commentaries online and in print each day. To contribute, click here. This article was written by Bob Manning, a career pathways coordinator from Stillwater.

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The Greek myth of Sisyphus is a story of a man condemned to repeatedly push a boulder up a mountain, only to have it roll down again. To meet the demands of his task he must believe that the rock will eventually topple over the other side once he reaches the summit. Yet, the boulder rolls backward and he realizes with crushing disappointment that his toil must continue with little hope of reward at the end. So it is with teachers today.

Minnesota educators nearing the end of their career entered the profession expecting a good pension would await them as a reward for an arduous career with modest pay at best. But in 1989, just as these young graduates were entering the workforce, the Legislature reduced their retirement benefits and added severe penalties for retiring before age 66. Teachers who have worked for over 30 years are now, like Sisyphus, realizing that the boulder has rolled down the hill and they are condemned to keep pushing for another 10 or more years. The great pension that teachers, and the public, have long associated with the teaching profession is now a myth.

There are two classes of teachers in Minnesota today: Tier 1 (hired before 6/30/89) and Tier 2 (hired 7/1/89 and beyond). For example, a Tier 1 teacher, after 34 years of service, will receive $39,340 each year if she retires at age 59. A Tier 2 teacher with the same salary and 34 years of service, but hired one day later, will receive $16,730 per year if they retire at the same age. Both teachers contributed the same amount toward their pension but are worlds apart in retirement.

Teacher pensions were a way to recruit and retain workers to a career of service that did not pay well but provided an attractive benefit at the end of a career. But changes in 1989 have forced Tier 2 teachers to pay more, receive less employer contributions and be severely penalized for retiring before reaching 66 years of age. Tier 2 teachers must now teach 44 years in order to receive a full pension. If they retire before age 66, even after 37 years of service, they’ll lose 43% of the pension that they funded.

Why does this matter?

Minnesota is experiencing labor shortages across five industries: technology, health services manufacturing, construction trades and education. In 2022 there were more than 13,000 education job vacancies reported across Minnesota, nearly double the number prior to the pandemic, according to the state Department of Employment and Economic Development, or DEED. The current shortage of teachers is not because there aren’t enough teachers, but because those trained to teach are quitting or never entered the profession out of college in the first place.

Other occupations, such as nursing and the trades, see an increase in wages to attract and retain employees. However, as education is experiencing the highest number of job vacancies in history, median wages have not risen. In fact, they’ve declined. Adjusted for inflation, teachers are making $3,644 less than they did a decade ago (National Education Association).

Young teachers are leaving the profession because the job is so difficult today. Just 7.3% of educators are under 25, compared with 13.8% across all industries (DEED). Veteran educators are discouraging young people from entering the profession and opting out of a full, well-deserved pension because they can’t keep pushing that boulder up the mountain any longer.

All other industries, including those facing tremendous labor shortages, rely on a quality public education system to educate and develop a talented workforce. As a sense of urgency to address labor shortages escalates in our state, recruiting and retaining high quality teachers should be our highest priority.

What can you do?

It’s in everyone’s best interest to support pension reform. Inform your neighbors, friends, colleagues and legislators that we may not have enough professionals to teach our children and train our workforce in the future. Without public support for teachers and pressure on the Legislature, we face an educational crisis that will be as difficult to reverse as a large boulder crashing down a mountain, with no one left to push it back up again.

Bob Manning, of Stillwater, is a career pathways coordinator.