Teacher Pension Plans Ranked by Funding Health
Teacher retirement systems cover millions of educators and school employees. Ranked by Pension Health Score — factoring funding ratio, trend, and risk level.
Why Teacher Pensions Matter
Teachers are the single largest group affected by public pension underfunding. In 15 states, educators are also outside the Social Security system, making their pension their primary retirement income. The recent Social Security Fairness Act restored some benefits, but pension funding remains the foundation of teacher retirement security.
Frequently Asked Questions
Are teacher pensions at risk?
Of the 25 teacher and education pension plans we track, 22 are below 80% funded — the threshold actuaries consider adequate. The average funding ratio is 66%. Plans below 60% face the highest risk of benefit reductions or increased taxpayer contributions.
What happens if my teacher pension is underfunded?
Most state teacher pensions are guaranteed by state constitutions or statutes. Even severely underfunded plans continue paying benefits, but the shortfall is typically closed through higher employee contributions, reduced cost-of-living adjustments (COLAs), or increased taxpayer funding. New hires may see reduced benefit formulas.
How is teacher pension funding different from corporate pensions?
Teacher pensions are defined-benefit plans sponsored by state or local governments. Unlike corporate pensions covered by PBGC insurance, public teacher pensions rely on state and local government backing. They also tend to use higher assumed investment return rates (7-7.5% vs 5-6% for corporate plans), which can mask underfunding.