Teachers are relatively risk-averse compared to other professionals, but the pension plans covering 90 percent of teachers are taking substantial risks on their behalf. In fact, in a new piece for Brookings, I argue that risk-taking behavior by teacher pension plans has the potential to harm individual teachers and the teaching profession writ large:
The average teacher may not follow the bond markets very closely, and concepts like the risk premium taken on by their respective pension plan may feel abstract, but that doesn’t mean they don’t affect the average teacher. When pension plans fail to hit their aggressive investment targets, that can create additional costs that trickle down to teachers.
You can read the entire piece at the Brown Center Chalkboard.