For years, public employee unions and some legislators have repeated the same line: Alaska’s workforce crisis began the day we closed the old defined-benefit (DB) pension plan in 2006, and the only fix is to reopen that system and promise lifetime payouts on the backs of taxpayers. They claim that’s the only way to keep teachers in classrooms, troopers in uniform, and police and firefighters on the job. But the truth has always been harder than the slogan. And now, thanks to a brand-new working paper and study published just three months ago by the University of Alaska’s Institute of Social and Economic Research, we finally have the data to prove it.
The study, “Recruitment, Retention, and Retirement Plan Structure: Evidence from Teachers,” by Noah Burke and Brock Wilson, is the cleanest natural experiment in the country. When Alaska moved new hires to a defined-contribution (DC) retirement plan on July 1, 2006, it created two nearly identical groups; teachers hired just before the cutoff with DB pensions, and teachers hired just after with DC accounts. The result? A perfect test of what really happens when you change the pension structure.
And the verdict is unmistakable: nothing changed.
Across every measurable category, researchers found no statistically significant difference between the two systems:
• The number of new teachers hired didn’t change.
• The average age of new hires dropped slightly, then disappeared in later checks.
• Experience levels stayed the same.
• Starting salaries stayed the same.
• Retention after one year, six years, nine years, and fourteen years – no difference at all.
Before we saddle the Alaska budget with another multi-billion-dollar defined-benefit liability, we must demand hard data, not anecdotes.
Even when the authors drilled down into subgroups such as STEM teachers, early-career teachers, and older hires, the result held. The switch from DB to DC made no difference in recruitment or retention.
If defined-benefit pensions were truly the secret weapon unions claim, the evidence would be obvious. Instead, it shows the opposite. The defined-contribution system has performed just as well, without the risk of bankrupting the state.
Unions like NEA-Alaska and the AFL-CIO continue to insist that “in 2006 the Legislature stripped public employees of a defined-benefit pension, and as a result Alaska has struggled to recruit and retain a qualified workforce.” That claim is now demonstrably false. Teacher hiring and retention trends that began before 2006 simply continued afterward. The pension structure was never the driving factor.
Teachers themselves confirm it. In the state’s 2022 TRS member survey, defined-contribution tier members ranked “switch me back to a defined-benefit pension” dead last among incentives that would keep them in the classroom, far behind higher pay, better health care, and more planning time.
We already owe nearly $7 billion in unfunded liabilities from the old pension system which is roughly $46,000 per Alaskan. Reopening a new DB tier would pile billions more in guaranteed promises on future generations and threaten the Permanent Fund as the inevitable funding backstop.
If the teacher data are any indication, the same logic almost certainly applies to public safety employees like troopers, corrections officers, firefighters, and police officers, who are constantly used as emotional leverage in this debate. Yet here’s the key difference: there is no credible, peer-reviewed research to support the claim that Alaska can’t recruit or retain first responders without a return to the old pension system. None. They won’t even publish the exit surveys.
No one has conducted for troopers, police, or fire what Burke and Wilson have now done for teachers: a rigorous, data-driven comparison of what actually happened before and after the 2006 reform. Why not? Don’t they want us to know? That study should serve as the model for every future conversation on public employee retention. Before we saddle the Alaska budget with another multi-billion-dollar defined-benefit liability, we must demand hard data, not anecdotes.
ALASKA WATCHMAN DIRECT TO YOUR INBOX
If we truly want to attract and keep qualified teachers, troopers, police officers, and firefighters, let’s focus on what actually works. Raise starting pay, especially in rural and high-cost areas. Fix the broken health-care cost spiral that is draining take-home pay. And improve the existing defined-contribution plan by holding underperforming investment managers accountable, something the Alaska Retirement Management Board itself has already admitted must happen.
Bringing back defined-benefit pensions would be the most expensive way imaginable to accomplish nothing. It would create new risks, new liabilities, and no measurable benefit for recruitment or retention. The evidence is clear: the pension structure is not the problem.
I encourage every union leader, every member of NEA-Alaska, every police and fire association, and every legislator still considering a return to defined-benefit pensions to read the Burke and Wilson study for themselves. The data are in, and the debate is over. Alaska taxpayers deserve better than another nostalgic, multi-billion-dollar promise that won’t put one more teacher in a classroom, one more trooper on the road, or one more firefighter in the station.
The views expressed here are those of the author.
14 Comments
“We already owe nearly $7 billion in unfunded liabilities from the old pension system which is roughly $46,000 per Alaskan.” This statement alone should keep anyone thinking that going back to defined benefits pension program is a good idea. State of Alaska government: Pay what you owe on the entire unfunded liability before you enact some version of the defined benefits program for state employees.
Agreed, We’re still in debt to all these people who retired from this old system. Pay our bills first.
When the Alaska pipeline is full oil, say 2 million barrels a day, then we can discuss a defined benefit system for the SOA. So maybe these entities that are howling for a SOA retirement plan should be putting their energies toward filling the pipeline.
Great article Rep. McCabe. Maybe the other legislators will read this article. The truth hurts them. Dan
Why is it that when reality bites (data driven) the Old Guard money mongers wail, wring & gnash? Because it’s ALL about saying they did something when it took little effort, puts dollar signs in the voters eyes & “because we’ve ALWAYS done it this way”. Not so fast, dollar dinosaur! Stop this government insanity!
Penny Johnson’s Comment gets 100 Golden Stars fore “Dollar Dinosaur”! GOVT SLOTH “NO physical/mental WORK needs to be performed. 1886 STATE/CITY INCORPORATED & UNIONIZED to feast on (1776 we the people) taxpayers, fore their non-productive GREED. Nobody notices GOVT CAPITALISM SHOUTING, yore hard earn wages R-OUR$ BYE EVAPORATING WRATH. As Voltaire said in 1728, “Paper money always returns to its intrinsic value – ZERO.
I am just curious have you done a study on the number of teachers who are leaving the district ,some after five years .
Finding out more information about where the new hires are coming from is needed as well. I have seen first hand many teachers coming here with visas from the Philippines. I also see first hand principals asking retired teachers to come back until they can hire a teacher. A few of the new staff they have put in these long term positions do not have teaching credentials or have taken the necessary reading classes. We do need the defined benefit plan returned. A plan needs to be developed on how to actually pay this , if you actually talked to the people who are doing the job you would get some real data . Teaching is a professional job
and they need to be valued as such! Continuously not paying more of their healthcare and expecting more and more every year are two of the things besides the no pension making them leave. Alaska is the only state that does not have a plan for public safety officers as well . If you do the stats on crime in our state you will see we have a lot of it. I see that Mr. McCabe was a retired Coast Guard and Pilot. He would probably have a pension from those jobs . Why continue to make teachers and public safety officers not happy in our state. Do your self a favor and just poll them you will see some real data.
Mary Bartz, as a teacher would you trade Defined Benefits for a well behaved classroom? Does the school administration allow teachers to “manage” their classrooms if there are unruly students who interfere with the learning by other students?
Finally, both the US Military and the federal employees no longer have a full defined benefit retirement system. The federal govt saw the huge black hole that DB was going to cost in the future. So, in 1986 it changed the DB program, CSRS, to FERS which is about 90% 401K. The US Military also changed from a DB to a blended retirement system similar to the federal civilian FERS–about 90% 401K.
Salary and benefits are always among the first criteria that employees (in any position, including police officers and teachers) are interested in. Refer to https://geometry-dashpc.io/
Lin Starter, actually according to a new Rand Study, the number one concern of teachers is classroom management–the unruly students taking away from the learning.
MCCABE DESPERATELY TRYING TO DISCONNECT FROM HIS CARBON CONVICTIONS! WRITING MULTIPLE ARTICLES ABOUT SUBJECTS THE PUBLIC MAY AGREE WITH YOU ON, ARE EFFECTIVELY PRESENTED TO THE WATCHMAN FOR THE PURPOSE OF DISTANCING HIMSELF FROM THE POISON THAT HE IS AN ADVOCATE FOR! BIBLICALLY THIS IS THE SAME TACTIC THAT SATAN HIMSELF USED! THE POISON STILL KILLS YOU, EVEN IF YOUR COMFORTABLE!!
As a 20 year teacher, currently employed by the Anchorage School District, I completely disagree with many points in the study and article. I got hired, along with many co-workers, after the new defined-contribution retirement plan was put into effect. I have no incentive to stay and put in a full 30+ years of service. Nothing is pulling me and many colleagues to stay in the educational service in Alaska, as our pensions are now tied to the stock market and and we have no guarantees how much money we will have when we retire.
The funds were grossly mismanaged and many teachers were overcharged management fees and lost potential investment funds until this came to light.
I want a defined-benefit pension, and many of my educational colleagues hired after 2006 also want this. Health benefits are also not mentioned, under the new plan, I have no health insurance after retirement unless I retire at 65 or put in 30+ years of service.
I have left the district and only came back to Alaska because of COVID. I have no incentive to stay, as I can get better benefits and pay elsewhere.
I strongly urge other voices to go into the consideration for a return to defined-benefit pensions, as all teachers I know in Anchorage, my colleagues who work so hard to support our future generation, want it back.
as someone who receives the defined-benefit pension I think it’s terrible that present day teachers don’t have one. The stock market is volatile especially with the clown in the White House.
Jon, the stock market is rigged, sorry your late to hear the truth. It, stock market, is 90% owned by a small group that controls all that interest and investment that’s happening.