Chartering a New Course to Retirement: How Charter Schools Handle Teacher Pensions

Amanda Olberg, Michael Podgursky, Thomas B. Fordham Institute, June 2011

This article explores the ways charter schools manage pensions for their teachers. In some states, charter schools are able to choose whether to participate in the state pension plan or "opt-out". Using data from six charter-heavy states, the study showed that participation varied widely from state to state. For charter schools that do opt-out, they frequently provide their teachers with defined-contribution plans (401(k) or 403(b)). However, some opt-out charters do not offer alternative retirement plans at all for their teachers. This study has further implications for teacher recruitment and retention.