Teachers' pensions and phased retirement

Written by kendra dahlstrom
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Teachers' pensions and phased retirement
Some teachers have the option for a phased retirement. (teacher image by Twilight Dragon from Fotolia.com)

Teachers, especially higher education state school teachers, often face the option of phased retirement. This gives future retirees the options of slowly cutting back hours in preparation for retirement. It also sometimes allows retired employees to come back to work. This usually happens during a teacher shortage.

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Types

Different schools classify phased retirement in various ways. For example, some teachers may only work seasonally, for example, one semester per year. Others work part-time, sharing the teaching load with another instructor. Other types of phased retirement include an extended leave of absence and temporary work. In most of these cases, the teacher receives part pension and part salary.

Incentive

When experts foresee a teacher shortage, sometimes state legislatures implement a phased retirement program. This keeps those teachers who might have retired around a bit longer so they lose fewer instructors. Sometimes teachers who have already retired come back to work and receive a regular paycheck in addition to their entire pension check, according to the National Association of State Retirement Administrators (NASRA).

Limitations

When state legislatures implement phased retirement programs allowing retirees to come back to work for a regular paycheck and pension check, typically these regulations include several limitations. Usually teachers can only work a certain limited amount of hours per year. Also, retirees can only come back to work for a specific amount of time and they must have been officially retired for a specific amount of time before coming back, according to NASRA.

Benefits

Benefits of a phased retirement plan for teachers include a more gradual switch from a regular salary to a pension paycheck. Sometimes an abrupt transition proves difficult for teachers. Also, for retired teachers needing more income, phased retirement plans sometimes allow them to come back to work and earn more money to supplement their pension. Benefits for employers include retention of experienced, quality teachers and lower benefit expenses when the teachers work part-time instead of full-time.

Drawbacks

There are some negatives associated with a phased retirement plan as well. Sometimes actuarial costs increase when more teachers work fewer hours, says NASRA. Also, sometimes peers become resentful of retired teachers coming back to work for a "double" paycheck.

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