SREB Teacher Compensation Dashboard
The Teacher Compensation Dashboard features state-by-state annual data for the Southern region on average compensation packages to teachers including: teacher salaries, retirement benefits, health benefit options, and calculations on typical take-home pay for teachers. For more information, contact Megan Boren.
Teacher Salary Footnotes
Definitions and Sources
Cost of Living Index (COLI) (%): The average annual cost of living index percentage by state, assuming the national COLI is 100%. It is the cost of achieving a certain level of utility (or standard of living) in one year relative to the cost of achieving the same level the next year. Sourced from the Council for Community and Economic Research. COLIs are listed from 2016 on.
Teacher Wage Penalty (%): How much less, in percentage terms, public school teachers are paid in weekly wages relative to other college-educated workers (after accounting for factors known to affect earnings such as education, experience and state residence). Sourced from Economic Policy Institute reports:
- “Teacher Pay Penalty Dips but Persists in 2019″
- “The teacher weekly wage penalty hit 21.4 percent in 2018, a record high”
- “The teacher pay penalty has hit a new high: Trends in the teacher wage and compensation gaps through 2017”
- “The teacher pay gap is wider than ever”
All Teacher Salary Averages: 2013-2014 through 2019-20 school years. Sourced from two National Education Association reports (for available corresponding years): “Rankings of the States and Estimates of School Statistics” and “Teacher Salary Benchmark Report.”
Minimum 0-Yr, 15-Yr, 35-Yr Salary: Based on SREB review of state minimum teacher salary schedules from state websites for teachers with bachelor’s and master’s degrees. All figures from the corresponding school years, with the exception of the Delaware 2018-19 school year which uses figures from the 2019-20 school year. Figures do not include any state or local supplements or additions for higher degree attainment. Florida, Louisiana, Maryland and Virginia do not have minimum teacher salary schedules. Minimum starting salaries for these states reflect the lowest full-time public school teacher salary paid in a district within the state.
Time to Max Salary: The number of years it will take a teacher to reach the maximum salary available on the statewide teacher salary schedule, per degree label. These figures do not include state bonuses or local supplements.
Time to Reach $50,000: The least number of years it will take a teacher to reach $50k salary based on the state minimum salary schedule, not including state bonuses or local supplements.
Teacher Retirement Footnotes
All retirement plan figures are for the corresponding fiscal years (in most states identical to the school years) from 2018 on. Plans identified with tier levels are defined benefit plans.
Definitions and Sources
Defined benefit (DB): A pension plan that is designed to provide participants with a predefined, predictable and guaranteed benefit based on a formula that takes into account an employee’s compensation, years of service and age, or a combination thereof. Many states have instituted tiered levels with plan changes based on year hired.
Defined contribution (DC): Plans such as 401(k), 403(b) or 457(b) in which retirement savings grows through contribution amounts and investment strategy. The retirement benefit is not pre-determined and is entirely dependent upon the account balance at retirement.
State Pension Benefit Formulas: Multiplier percentage multiplied by average final salary calculation multiplied by years of service. Sourced from state retirement system handbooks.
Social Security: Social Security originally only covered private workers, but in the 1950s, Congress allowed states to extend coverage to its workers. Some states opted out of enrolling their workers and instead relied on pension plan payout formulas. About 40% of public-school teachers (more than 1 million) are not covered by Social Security according to Bellwether Education Partners.
Vesting period: A federally mandated minimum period of time before a retirement plan is unconditionally owned by an employee.
Employee and Employer Contribution (%): Percentage contribution amounts mandated by each system. Employee contribution (%) is sourced from state retirement system handbooks.
Employer Contribution (%) is the individual percentage contribution required by state and district funds; 2018-19 percentage sourced from state retirement system handbooks or actuarial reports. The pension and hybrid plan contributions are actuarial contributions. The figures used are the latest calculations from Teacherpensions.org when not found in state financial reports.
Employer Normal Cost Rate (%): The amount of an employer’s contribution that goes toward a teacher’s retirement benefit (as opposed to paying for unfunded liabilities). Sourced from state retirement system financial reports.
Total Contribution to Teacher Benefit (%): The total contribution amount that goes directly to a teacher’s retirement benefit, which is calculated by adding the Employee Contribution + the Employer Normal Cost Rate.
Contribution to Unfunded Liabilities (%): The amount from an employer’s contribution that is used for paying down unfunded liabilities (as opposed to contributing directly to a teacher’s retirement benefit). Sourced from state retirement system financial reports and handbooks.
Full Retirement Status: Reflects eligibility to retire with full benefits. All states offer an early retirement option with partial benefits. Retirement status in any state is still subject to federal IRS regulation. Sourced from state retirement system handbooks.
Typical Gross Annual Pension Benefit: What the average teacher retiree may gross annually in retirement income. Net benefits and social security benefits are not calculated. This calculation provides a potential typical gross annual pension benefit in each year by state retirement tier. This calculation is not provided for defined contribution or hybrid plans due to the vast number of variables in investments and returns.
SREB Assumptions for Typical Gross Annual Pension Benefit
- The calculations utilize the state plan’s benefit formula which is usually: a multiplier, times average of highest pay over a certain number of years, times total years of service. For all calculations, teacher retirees were assumed to be aged 65 with 30 years of service – the common age and service requirement across the region to receive full pension benefits.
- SREB calculated the highest average pay over a certain number of years by: 1) assuming the state’s average top salary as the highest salary amount, 2) calculating the additional highest years of salary by reducing the average top salary amount by the regional average step increase amount linked to years of service that most states utilize in their teacher salary schedule, and 3) averaging these salary amounts for the number of years required in each state’s pension benefit formula.
Years to Break Even and Percentage of Teachers Who Will Not Break Even: The number of years it will take a teacher in each plan to earn a pension worth more than their own contributions plus interest and the percent of teachers in the state who will not exceed this point. This analysis does not apply to defined contribution or hybrid plans. Sourced from an analysis by Aldeman and Johnson: https://www.teacherpensions.org/sites/default/files/TeacherPensions_Negative%20Returns_Final.pdf
Individual State Notes
Alabama plans are based on year hired. Tier I: teachers hired before 2013; Tier II: teachers hired in or after 2013.
Delaware Tier I: teachers hired before 2012; Tier II: teachers hired in or after 2012.
Florida Tier I: teachers hired before July 1, 2011. The pension formula is calculated by a range multiplier based on age and years of service (age 62 or 30 years 1.60%; age 63 or 31 years 1.63%; age 64 or 32 years 1.65%; age 65 or 33 years 1.68%). Tier II: hired on or after July 1, 2011. The pension formula range multiplier changes (age 65 or 33 years 1.60%; age 66 or 34 years 1.63%; age 67 or 35 years 1.65%; age 68 or 36 years 1.68%). New teachers are automatically enrolled in the Investment (DC) plan but can opt to switch to the defined benefit plan at any time. Current teachers hired before July 1, 2011 with 5 years of service and those hired on or after July 1, 2011 with 8 years of service can also opt into a hybrid option within the Investment plan to include partial pension benefits.
Georgia Defined Benefit Legacy: teachers hired before 2009; GSEPS Georgia State Employees Pension and Savings plan: teachers hired in or after 2009.
Kentucky TRS I: hired prior to July 1, 2002; TRS II: between July 2002-2008; TRS III: July 1, 2008 or after; TRS IV applies to future teachers hired on or after Jan 1, 2022 – there are currently no teachers in this tier. The pension formula is calculated by a range multiplier based on a scale of years of service for those hired after 2008. Ranges include 1-10 years (1.7); 10.01-20 (2); 20.01-26 (2.3); 26.01-30 (2.5); 30+ (3).
Louisiana Tier I: system member before July 1, 1999. Those who retire later (age 65+ or 30+ years of service) are incentivized with a 2.5% benefit multiplier. Tier II: system member between July 1, 1999 and December 31, 2010; Tier III: system member between 2011 and June 30, 2015; Tier IV: system member from July 1, 2015 on.
Maryland has two tiers including the Alternate Contributory Pension Selection plan for teachers hired before July 1, 2011 and the Reformed Contributory Pension Benefit plan for those hired on or after July 1, 2011. Teachers may opt into supplemental defined contribution plans — 457, 401(k) and 403(b) options are available — but there is no employer contribution to these options.
Mississippi Tier I: hired before July 1, 2007; Tier II: hired between July 1, 2007 and June 30, 2011; Tier III: hired on or after July 1, 2011.
North Carolina has instituted a contributions-based benefit cap of $100,000 (adjusted annually for inflation) on a teachers’ average final compensation.
Oklahoma Tier I: hired before July 1, 1992; Tier II: hired between July 1, 1992 and November 1, 2011; Tier III: hired after Nov 1, 2011. There is also an optional 403(b) defined contribution plan but offering this is left up to districts.
South Carolina Class 2: hired before July 1, 2012; Class 3: hired on or after July 1, 2012. Teachers can also opt between the defined benefit applicable to their hire date or the defined contribution plan.
Tennessee’s newly hired teachers enroll in a hybrid plan. Those hired before 2014 participate in the Legacy DB plan and optional 401(k). Tennessee’s hybrid plan option to teachers includes partial pension and investment savings options. Teachers are automatically vested into the investment plan portion, while it takes five years to vest in the pension plan portion. Employees contribute 2% to the investment and 5% to the pension portion, while the employer contributes 5% to the investment and 4% to the pension portion.
Texas has six tiers in its teacher retirement system based on multiple eligibility criteria including qualified to be grandfathered, when service began, when vested, and active status. See this handbook for details: https://www.trs.texas.gov/TRS%20Documents/benefits_handbook.pdf.
Virginia’s current teachers had the option of choosing one of two defined benefit plans and could opt into the new hybrid plan. Teachers hired after 2014 enroll in a hybrid pension and investment plan. Virginia’s defined contribution portion of the hybrid plan has a gradual vesting period (50% vested after 2 years, 75% vested after 3 years, fully vested after 4 years). Employees contribute between 1 to 5%, to the investment portion and 5% to the pension portion. The employer contributes between 1 to 3.5% to the investment portion and 15.68% to the pension portion. An optional 457 Deferred Compensation plan is also available to teachers.
West Virginia Tier I: teachers hired before July 2015; Tier II: teachers hired after July 1, 2015. Teachers in Tier I who were members of the state retirement plan before July 1, 1991 receive 15% employer contributions. West Virginia had a defined contribution plan option between 1991 and 2005 when it was closed to new membership; it is not an option for new teachers to participate in this plan currently. For those who opted into this plan prior to 2005, the plan had a gradual vesting period of (1/3 vested at 6 years, 2/3 vested at 9 years, and fully vested at 12 years).
“Social Security, Teacher Pensions, and the “Qualified” Retirement Plan Test” – Chad Aldeman, Bellwether Education Partners
Comparing Defined Benefit and Defined Contribution Plans: Example from the Florida Retirement System: https://www.myfrs.com/pdf/forms/BCS.pdf
“Teacher Pension Plans: How They Work, and How They Affect Recruitment, Retention, and Equity” – Chad Aldeman, Bellwether Education Partners
Teacher Health Benefits Footnotes
All health insurance information displayed represents state-based options only for the 2019-20 school year or fiscal year (identical in most states) from 2019 on. Because most states do not display archived health insurance information, data prior to 2019-20 will not be included in this dashboard. Plan information was retrieved through state-specific benefit websites.
Premiums (Individual and Family): The amount paid monthly for health insurance. Premiums listed for both Individual and Family coverage are the maximum amount paid by employees.
Deductibles (Individual and Family): The amount you pay for covered health care services before the insurance plan starts to pay.
Out of Pocket Maximums (Individual and Family): The most you must pay for covered services in a plan year. This includes deductibles, copayments and coinsurance for in-network care and services.
Individual State Notes and Sources
Alabama: Public Education Employees’ Health Insurance Plan (PEEHIP)Public Education Employees’ Health Insurance Plan (PEEHIP)
Delaware: Delaware Department of Human Resources
Florida: Florida Department of Management Services. In addition to the statewide benefits displayed in the dashboard, Florida provides additional plans through other health insurance providers that are district specific.
Georgia: Georgia State Health Benefit Plan. In addition to the statewide benefits displayed, some Georgia districts provide additional plans through other health insurance providers. These locally based plans are not displayed.
Kentucky: Kentucky Employees’ Health Plan Kentucky’s premium rates are decided by the formula Plan Option Cost + Tobacco Usage + Living Well Promise + Time Specific adjustments.
Louisiana: State of Louisiana Office of Group Benefits
Maryland: The state does not provide an option for educator health insurance. Instead, health insurance is provided at the district level and therefore is not represented in this dashboard. Example: :Charles County Public Schools.
Mississippi: Mississippi Department of Finance and Administration. Mississippi’s premium rate is for Horizon Employees (hired after 1/1/2006).
North Carolina: North Carolina State Health Plan. North Carolina’s premium rate is for those with completed tobacco attestation.
Oklahoma: Oklahoma Office of Management and Enterprise Services – Group Insurance Division. Premium costs are deducted by the amount the state contributes to each plan, which in 2019-20 was equal to single coverage premiums from the HealthChoice High plan.
South Carolina: South Carolina Department of Education
Tennessee: Tennessee Partners for Health. Tennessee’s premium rates only encompass the approximately 45% state subsidy found in the healthcare documentation.
West Virginia: West Virginia Public Employees Insurance Agency. West Virginia’s deductibles and out of pocket maximums vary by salary for three of their plans.
Teacher Take Home Pay Footnotes
Typical Teacher Take Home Pay: What the average first year teacher, mid-career or 15th year teacher, and average 35th year teacher brings home in their paycheck after deducting their required retirement contribution, their health insurance premium costs, and taxes.
SREB Calculation Assumptions for 2019 Take Home Pay
- Calculations do NOT include extra costs for additional health benefits, FSA or HSA options, etc., nor additional retirement savings by employees.
- July 1, 2019 date used for calculation of federal and state taxes using ADP.com with applicable marital status and one allowance.
- Typical 1st year teacher: Hired in 2018. Average state starting bachelor’s salary. Single w/ no dependents. Selects HMO plan for employee only. Eligible for newest pension plan tier or investment/hybrid plan option.
- Typical 15th year teacher: Hired in 2004. Average state salary. Married with two children, spouse is employed. Selects family PPO plan. Eligible for pension plan tier applicable to hire date.
- Typical 35th year teacher: Hired in 1984. Average state top salary. Married with two children under age 26; employed spouse. Selects family PPO plan. Eligible for pension plan tier applicable to hire date.
SREB Calculation Assumptions for 2020 Take Home Pay
- Calculations do NOT include extra costs for additional health benefits, FSA or HSA options, etc., nor additional retirement savings by employees.
- July 1, 2020 date used for calculation of federal and state taxes using ADP.com with applicable marital status and one allowance.
- Typical 1st year teacher: Hired in 2019. Average state starting bachelor’s salary. Single w/ no dependents. Selects HMO plan for employee only. Eligible for newest pension plan tier or investment/hybrid plan option.
- Typical 15th year teacher: Hired in 2005. Average state salary. Married with two children, spouse is employed. Selects family PPO plan. Eligible for pension plan tier applicable to hire date.
- Typical 35th year teacher: Hired in 1985. Average state top salary. Married with two children under age 26; employed spouse. Selects family PPO plan. Eligible for pension plan tier applicable to hire date.