Skip to main content Accessibility help
×
×
Home

Surplus deferred pension compensation for long-term K-12 employees: an empirical analysis for the Denver Public School Retirement System and four state plans

  • MICHAEL V. MANNINO (a1) and ELIZABETH S. COOPERMAN (a1)

Abstract

This study uses a unique data set of retiree characteristics and salary histories for administrators, teachers, and non-professional employees of the Denver Public School Retirement System (DPSRS) to analyze surplus deferred compensation for DPSRS and four state K-12 defined benefit pension plans. We find sizable levels of surplus deferred compensation for each plan, with significant differences across plans, job classes, and age groups. Across plans, differences in cost of living allowances impact the expected present value of retirement benefits more than benefit table differences when controlling for each respective factor. Somewhat surprisingly, the plans in our study with the largest present value of future benefits had lower employee contribution rates. Pension wealth for reduced benefits showed larger wealth accrual at younger ages than full, unreduced benefits, and younger cohorts starting work at an earlier age received significantly higher surplus deferred compensation.

Copyright

Corresponding author

Correspondence address: The Business School, University of Colorado Denver, Campus Box 165, P.O. Box 173364, Denver, CO 80217-3364, USA.

References

Hide All
Biggs, Andrew G. (2009) Public pensions cook the books. The Wall Street Journal, 6 July 2009. Available online at http://online.wsj.com/article/S8124683573382697889.html
Brainard, Keith (2007) Public Fund Survey Summary of Findings for FY 2006. p. 7. The Public Fund Survey available online at http://www.publicfundsurvey.org (accessed 14 April 2008)
Clingman, M. and Nichols, O. (2004) Scaled factors for hypothetical earnings examples under the 2004 Trustees Report assumptions. Social Security Administration Actuarial Note, No. 2004.3, December. Available online at http://www.socialsecurity.gov
Costrell, Robert M. and Podgursky, Michael (2007 a) Efficiency and Equity in the Time Pattern of Teacher Pension Benefits: An Analysis of Four State Systems. The Urban Institute, available online at http://www.urban.org/url.cfm?ID=100170
Costrell, Robert M. and Podgursky, Michael (2007 b) Golden peaks and Perilous Cliffs: Rethinking Ohio's teacher pension system. Education Resources Information Center, Thomas B. Fordham Institute, available online at http://www.edexcellence.net/foundation/publication/index.cfm
Costrell, Robert M. and Podgursky, Michael (2009 a) Peaks, Cliffs and Valleys: The Peculiar Incentives in teacher retirement systems and their consequences for school staffing. Education Finance and Policy, 4(2): Spring, 175211.
Costrell, Robert and Podgursky, Michael (2009 b) Teacher retirement benefits: even in economically tough times, costs are higher than ever. Education Next, 9(2): Spring, 5963; available online at http://www.hoover.org/publications/ednext/Teacher_Retirement_Benefits.html
Costrell, Robert and Podgursky, Michael (2009 c) Distribution of Benefits in Teacher Retirement Systems and Their Implications for Mobility, on educationnext, (October) online at http://educationnext.org/files/Costrell_Podgursky_mobility.pdf
DiCarlo, Matthew, Johnson, Nate, and Cohran, Pat (2008) AFT Survey and Analysis of Teacher Salary Trends 2007, AFT Research Paper, pp. 137. Available online at http://www.aft.org/research
DiNapoli, Thomas P. (2009) Employer Pension Fund Contributions to Increase in 2011, News from the Office of the New York State Comptroller, Press Release, 3 September 2009. Available online athttp://www.osc.state.ny.us/press/releases/sept09/090309.htm (accessed 13 June 2010).
Fitch, Stephane (2009) Gilt-Edged Pensions. Forbes Magazine, 16 February 2009. Available online at http://www.forbes.com/forbes/2009/0216/078_print.html
Furgeson, Joshua, Strauss, Robert P. and Vogt, William B. (2006) The Effects of Defined Benefit Pension Incentives and Working Conditons on Teacher Retirement Decisions. Education Finance and Policy, 1(3): Summer, 316348.
Hansen, Janet S. (2008) Teacher pensions: A background paper. Committee for Economic Development, ED502293, May. Available online at http://www.ced.org/docs/report/report_educ200806pensions.pdf
Hedges, Larry V. (1981) Distribution theory for Glass's estimator of effect size and related estimators. Journal of Educational Statistics, 6(2): Summer, 107128.
Hogarth, J. (1988) Accepting an early retirement bonus: an empirical study. Journal of Human Resources 23: 2133.
Kotlikoff, L. and Wise, D. (1989) Employee retirement and a firm's pension plan. In Wise, D. (ed.), The Economics of Aging. Chicago: University of Chicago Press, pp. 279333.
Lazear, E. P. (1990) Pensions and deferred benefits as strategic compensation. Industrial Relations, 29(2): (Spring), 263280.
Lazear, E. P. and Moore, R. L. (1988) Pensions and turnover. In Bodie, Z., Shoven, J. B. and Wise, D. (eds) ‘Pensions in the U.S. Economy’ Chicago: University of Chicago Press for NBER, 163188.
Mannino, Michael V. and Cooperman, Elizabeth S. (2009) Deferred compensation for career employees in public defined benefit pension plans: evidence from Colorado PERA. Journal of Pension Economics and Finance, 8(1): 3561.
Mitchell, Olivia S., Poterba, James M., Warshawsky, Mark J. and Brown, Jeffery (1999) New evidence on the money's worth of individual annuities. American Economic Review 89(5): 12991318.
Nelson, F. Howard and Gould, Jewell C. (2002) Teacher Salaries, Expenditures and Federal Revenue in School Districts Serving the Nation's Largest Cities, 1990–91 to 2000–01, American Federation of Teachers (AFT) Research Report, pp. 128. Available online at http://www.aft.org/research
Pew Center on the States (2008), Promises with a Price: Public Sector Retirement Benefits. Philadelphia, PA: The Pew Charitable Trusts. Available online at http://www.pewtrusts.org/uploadedFiles/wwwpewtrustorg/Reports/State_policy/pension_report.pdf (accessed on 15 April 2008).
Schiller, Bradley R. and Randall, D. Weiss (1980) Pensions and wages: a test for equalizing differences. Review of Economics and Statistics, 62(4): 529538.
Shiller, Robert J. (2005) The Life-Cycle Personal Accounts Proposal for Social Security: An Evaluation. Yale ICF Working Paper No. 05–06, Cowles Foundation Discussion Paper No. 1504, March 2005. Available online at http://ssrn.com/abstract=703221
Spriggs, William E. and Ratner, David (2005) Social security price indexing proposal means benefit cuts for workers. EPI Issue Brief 209, Economics Policy Institute, 1 June. Available from http://www.epi.org/content.cfm/index_pubs-ib
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

Journal of Pension Economics & Finance
  • ISSN: 1474-7472
  • EISSN: 1475-3022
  • URL: /core/journals/journal-of-pension-economics-and-finance
Please enter your name
Please enter a valid email address
Who would you like to send this to? *
×

Keywords

Metrics

Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed