Learning from Charters - Fordham digs in on pensions

Michael Podgursky and Amanda Olberg of the Fordham Institute are releasing a paper today that examines how charter schools handle teacher pensions in states that allow charters to opt out. The paper shows various choices charters make with regard to their pensions and identifies several interesting trends. Observations include different levels of participation in state plans based on school location (rural or urban), age of the prospective teacher workforce and freestanding schools vs. part of a charter management organization. Learning more about why these factors make a difference to compensation decisions is very important for all education decision makers.

This kind of analysis is especially crucial in these tough times. No serious effort to improve education and contain educational costs can occur without a close look at teacher compensation which comprises between 40-55% of district operating budgets. And charter success and failures can inform district decision-making, especially around what works and what doesn’t work to provide the right incentives to attract the best teachers and to keep them there.

Next step: The full compensation package

Our hope is that Podgursky and Olberg are able to take this beginning analysis and continue to understand the structure of pensions in the context of the full compensation package.  As they rightly point out, when districts and schools address compensation, they must look at every component including benefits (health, pension and fringe), the level of starting salaries and how salary is structured over time and teaching career to reward performance, responsibilities and longevity.  In the end, teachers’ choices are determined by the whole package.

Using Compensation for District Transformation

Since charter schools have considerably more freedom to innovate around compensation and job structure, districts and policy makers could learn from their efforts to attract and keep the highest quality workforce. What structure is significantly more attractive for the teachers who contribute the most? And what system not only attracts high potential teachers to make a career in teaching but enables school and system leaders to manage their workforce mix and compensation spending for the benefit of student learning over time? What circumstances affect different choices?

It’s important to remember that existing outmoded compensation structures were created to complement the industrial age school model, where teachers worked alone in their classrooms in one-size fits all time slots and class sizes. We need to redesign compensation in the context of a new vision for school organizations where time and student grouping are more fluid, teachers can create relationships with their students and respond to individual needs, and have time and support to collaborate with team members who bring a complementary set of skills and passion to their work. This research adds to creating a clear picture of full compensation spending.