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As unfunded liabilities continue to grow, the impact of rising pension costs is borne and felt by teachers in myriad ways. Retirement contributions are going up for all teachers, and the benefits are shrinking for newer teachers. Rising pension costs are one of the reasons teacher salaries are flat, or even declining in some places when adjusted for inflation.

On the whole, pension costs are taking a bigger and bigger bite out of education funding. A recent study from Equable found the share of state education dollars funding teacher pensions has risen from 7.5 percent in 2001 to 14.4 percent in 2018. This means that less money is available for building maintenance, instructional materials, professional development, or any other priority, including efforts aimed at resource equity and closing opportunity and achievement gaps.

Share of U.S. K-12 Spending Consumed by Pension Contributions, 2001-2019