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.