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Policy & Finance

Teachers' Pensions: Who Pays?

California school districts have seen their pension costs rise significantly since state laws in 2012 and 2013 were passed to rescue the state’s two pension systems. The payments go to the pension systems that cover teachers, administrators and other school employees. As of 2016-17, contribution rates for teachers were fixed at 10.3 percent of their pay. But payments from districts are scheduled to increase each year – from 8.3 percent of teacher and administrator salaries in 2013-14 to 19.1 percent in 2020-21, at a projected cost of more than $7 billion. The state’s share of payments is also increasing, but not as much as in districts. How to pay for the promises they have made to teachers without cutting into services for students represents an increasing challenge for districts throughout California.

EdSource’s 5-minute video provides background on school pensions and possible solutions to rising costs.