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Teacher Pensions

Part of the compensation of professional employees, whether in the public or private sector, takes the form of employer contributions for retirement. From the end of World War II until the early 1970s, public and private sector professionals had similar types of retirement plans. However, due to increased federal regulation of private sector plans and growing worker mobility, the way that retirement benefits are structured in the public and private sectors began to diverge. At present, most private sector professionals are in plans in which employers make contributions to a retirement account owned by employees. Such plans are called defined-contribution (DC) plans. In contrast, public sector professionals, including public educators, are nearly universally enrolled in defined-benefit (DB) plans. In DB plans, employees are guaranteed a ...

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