Teacher Retirement Benefits

Abstract

The ongoing global financial crisis is forcing many employers, from General Motors to local general stores, to take a hard look at the costs of the compensation packages they offer employees. For public school systems, this will entail a consideration of fringe benefit costs, which in recent years have become an increasingly important component of teacher compensation. During the 2005-06 school year, the most recent year for which U.S. Department of Education data are available, the nation's public schools spent $187 billion in salaries and $59 billion in benefits for instructional personnel. Total benefits added about 32 percent to salaries, up from 25 percent in 1999-2000. The increase reflects the well-known rise in health insurance costs, but it also appears to include growing costs of retirement benefits, which have received much less attention.