In this "Ed Short" from the Thomas B. Fordham Institute, Amanda Olberg and Michael Podgursky examine how public charter schools handle pensions for their teachers. Some states give these schools the freedom to opt out of the traditional teacher-pension system; when given that option, how many charter schools take it? Olberg and Podgursky examine data from six charter-heavy states and find that charter participation rates in traditional pension systems vary greatly—from over 90 percent in California to less than one out of every four charters in Florida. As for what happens when schools choose not to participate in state pension plans, the authors find that they most often provide their teachers with defined-contribution plans (401(k) or 403(b)) with employer matches similar to those for private-sector professionals. But some opt-out charters offer no alternative retirement plans for their teachers (18 percent in Florida, 24 percent in Arizona).

Amanda Olberg is a Research Assistant at the Thomas B. Fordham Institute. She graduated from Cornell University in May 2009 with a degree in Applied Economics and Management. She spent the past year serving as an AmeriCorps VISTA at the Ithaca Youth Bureau, a local government agency in Upstate New York, and is thrilled now to have the opportunity to work at the Thomas B. Fordham Institute. 

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Michael J. Podgursky is a professor of economics at the University of Missouri at Columbia. Dr. Podgursky serves on the board of editors of both Education Finance and Policy and the Peabody Journal of Education, as well as on a number of research-institute advisory boards. He also serves as a fellow in education policy at the George W. Bush Institute. He is a co-investigator at the National Center on…

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