Advancing a Free Society

Charter School Pensions: The Sum of Teacher Unions’ Fears

Friday, June 24, 2011

As if the teachers unions need another reason to hate charter schools, here’s one: The finding, from a new Fordham Institute report, that when given a chance to opt out of state pension systems, many charter schools take it. Furthermore, a fair number of these charters replace traditional pensions with nothing at all.

Why is this such a big deal? It’s not just that unions will worry that charter schools are mistreating their teachers. More fundamentally, if charter schools continue to multiply, and they are allowed to opt out of state retirement systems, those systems will collapse under their own weight–an outcome the unions will fight to the death.

First some background. The new Fordham study, by Michael Podgursky and Amanda Olberg, examines six large states where charters are allowed to opt out of the traditional pension system. In a few of these states, including California and Louisiana, most charters stay in the system. (That’s largely because teachers in those states don’t participate in Social Security; see the report for an explanation about that.) But in other states, including Arizona and Florida, most charters bolt. Typically they offer a 401(k) or 403(b) instead, but almost one-quarter offer either no pension or a plan without an employer match.

Continue reading Michael Petrilli at EducationNext

(photo credit: asterix611)