How Teacher Pension Financing
Impacts Student Equity in Connecticut
The State of Connecticut is subsidizing school districts by directly paying for all costs of teacher pensions. This per pupil pension subsidy allocates more dollars to higher performing, more affluent, and less diverse districts and puts districts with the greatest need at a systemic disadvantage in terms of resource equity and how they compensate their teaching workforce.
For those who are concerned with educational resource equity in Connecticut, a conversation about the funding of teacher retirement benefits is long overdue. Connecticut’s annual teacher pension contributions account for over a quarter of the state’s overall K-12 education budget. Given the enormity of the obligation, it is worth considering the extent to which these funds, borne entirely by the state, are allocated equitably.
Connecticut municipalities pay no portion of teacher pension obligations—even though these benefits are based upon the teacher salaries that local districts individually set. An inequitable state subsidy of district pension obligations therefore has tangible implications for students’ educational experiences.
This analysis does not suggest, and is not a prelude to, changing or revoking teacher retirement benefits or entitlements. Instead, it is entirely focused upon whether Connecticut’s unusual method of financing its pension obligations reinforces already-existing inequities for students.
New Equity Metric for Connecticut:
The Per Pupil Pension Subsidy
Public school districts have different per pupil pension costs because of variability in pensionable salaries, the number of teachers serving and their longevity, and student enrollment levels. By looking at each public school district’s pension obligations, and dividing them by student enrollment figures, we have established a new equity metric for Connecticut:
the Per Pupil Pension Subsidy.
This identifies how much the state spends per student in each public school district when it makes an annual contribution to the Teacher Retirement System.
By comparing the per pupil pension subsidy to district performance, socio-economic, makeup, and racial demographics—this report finds three serious causes for concern related to how Connecticut’s pension funding structure impacts student equity.
Connecticut pays larger Per Pupil Pension Subsidies on behalf of high-performing districts with low resource needs—and thereby the students within them—than it does for districts with lower performance.
Connecticut subsidizes school districts—and thereby the students within them—at double the rate for more affluent students as for their peers from low-income families.
Connecticut subsidizes school districts—and thereby the students within them—at more than twice the rate for white students as for students of color.