Teachers' Pensions
Collier's New Encyclopedia (1921)
the granting of pensions to teachers after superannuation by the state, municipality or by a combination of either of these two and a professional organization of the teachers themselves. Teachers may be divided into two classes: contributory and non-contributory. Contributory pensions are granted from a fund partly made up of donations or subscriptions, by the teachers and in part by the state or municipality. Non-contributory pensions are granted outright by the state or municipality. The latter system is practiced in Germany, while the former is practiced in England and France. Germany and France also provide for the widows, orphans and other dependents of teachers as well. It was not till about 1895 that the duty of providing pensions for teachers was taken up in the United States. Previous to that pensions had been granted through the medium of mutual aid associations, all the funds being contributed by the teachers themselves. Since then state aid has been granted in Arizona, California, Illinois, Indiana, Maine, Maryland, Michigan, Massachusetts, Minnesota, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Dakota, Rhode Island, Utah, Vermont, Virginia and Wisconsin. Of these the non-contributory system is practiced only in Arizona, Maine, Maryland, New Hampshire, Rhode Island and Virginia. Of the contributory system that in Massachusetts is most typical. There the teachers are required to contribute from three to seven per cent. of their salaries toward the pension fund, to which the state adds an equal amount. Thirty years service, or a minimum age of sixty years entitles the recipient to retirement on a pension in proportion to his contributions. Of the municipalities in this country which have been foremost in providing retirement pensions are New York, Detroit, Mich., and St. Louis, Mo. In Brooklyn, N. Y., a contributory system was adopted by which only a cent a year was deducted from the salaries of the teachers. In 1905 the state legislatures amended the city charter which enabled both Brooklyn and New York to adopt a contributory system, which was at the time supposed to be the most advanced of its kind. In 1915 the pension fund was declared to be bankrupt, since which time a new system has been adopted.
What Has Changed in the Last Century
When Collier's wrote this in 1921, state-aided teacher pensions were a novelty barely 25 years old, listed state by state, with Massachusetts as the model and the New York City fund freshly declared bankrupt in 1915. Today every US state runs a retirement system for its public school teachers, most of them contributory defined-benefit plans, and they are among the largest institutional investors in the country. Two later developments the 1921 account could not foresee: teachers in a number of states were left outside Social Security when it was extended to public employees, so their pension is their only public retirement income; and since the 2000s several states have pushed new hires into hybrid or 401(k)-style plans as unfunded liabilities mounted. The bankruptcy Collier's noted in passing turned out to be the recurring theme of the century, not an isolated mishap.
Written for this edition, 2026.