Administrators Get Disproportionately Large Pensions



By 09/19/2014

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The Empire Center and several other organizations have published a database of New York teacher and administrator pensions that lists the pensions and service years of every member. Contrary to its name, the highest pensioners in the New York Teacher Retirement System are not teachers. Fourteen out of fifteen of the top pensioners are former superintendents and one a research professor. None retired as public school teachers.

In New York, as in most other states, pensions are based on an employee’s years of service and final average salary, and teachers, principals, and superintendents all participate in the same retirement system. While not all administrators are former educators and only serve an administrative position for a few years, many have come into the profession as a former principal or teacher or other administrative pathway, often with years within the same state and local system. Long tenure in a single retirement system, paired with a high superintendent salary, equates to a very lucrative pension. In Missouri, a teacher who stays for a full career accrues $250,000 in lifetime pension wealth, a principal accrues over $360,000, and a superintendent $450,000.

In New York, one superintendent had close to 40 years of service in the Sewanhaka Central Schools, with only five years as superintendent. His annual pension totals $223,000, significantly more than a teacher with the same amount of experience would get. The highest paid retiree was the superintendent of the Commack school district, who has an annual pension of $325,000 (based on a final salary of over $655,000), the lifetime equivalent of over $5.5 million (a true pension millionaire). These are extreme examples that can occur because traditional pension formulas rely so heavily on final salary and total service years, and many superintendents have accumulated prior service years as teachers or mid-level administrators to count toward a full career. A career educator can work and pay into the retirement system with lower teacher or principal contribution rates for the majority of their working years and still qualify for a pension for the rest of their life based on their much higher superintendent’s salary.

What is the impact of these top officials on student achievement? One would hope that such sizeable pay and benefits would mean a significant boost in student outcomes. According to a new Brookings report, however, superintendents in Florida and North Carolina had only a minimal effect on student achievement. Compared to teachers, who have a larger impact on student achievement, superintendents had little. Administrators of course play a vital role in other aspects of managing a district, but they benefit disproportionately from the heavily back loaded nature of the traditional pension system.

– Leslie Kan

Leslie Kan is a pensions analyst at Bellwether Education Partners. This first appeared on teacherpensions.org




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