When Teachers Choose Pension Plans: The Florida Story

Although long ignored by education-policy analysts, the structure of teacher retirement benefits has come under increasing scrutiny in recent years. The vast majority of teachers, like other state and local public employees, are covered by traditional defined-benefit (DB) pension plans. Now rare in the private sector of the United States economy, these plans provide a retired teacher with a guaranteed lifetime benefit, the annual value of which is typically based on his number of years of service and average salary during the final years of his career. A teacher is often required to contribute from her salary to funds set aside to pay for this plan, but the size of her benefit is not tied to the amount of any contributions.Critics of existing teacher pension systems raise two broad sets of concerns. First, they note that the time lag between when the government funds and pays out retirement benefits encourages politicians to contribute too little to their pension systems, effectively borrowing from future taxpayers to fund current spending on government services.The shortfalls facing state and local pension systems covering teachers and other public workers due to persistent underfunding are staggering. Novy-Marx and Rauh13 estimate that achieving full funding of promised pension liabilities nationally over thirty years would require a tax increase of $1,385 per household each year. A more likely outcome is substantial cuts to public services such as education.Second, critics note that the reliance on traditional DB pension plans makes total teacher compensation severely back-loaded, potentially hindering efforts to improve teacher quality. Most of these plans have vesting periods of five or more years and are structured so that employees do not amass substantial benefits until late in their careers -- at which point benefits increase rapidly. These features may make teaching less attractive to individuals who are uncertain of whether they will remain in the profession long enough to benefit or would prefer to receive a higher salary to support present consumption. Recent evidence confirms that DB pension plans lead some veteran teachers to continue teaching solely for the sake of increasing pension wealth, while encouraging others to retire prematurely so as not to sacrifice years of benefit payments.The back-loading of benefits also imposes heavy costs on career-switchers and geographically mobile teachers, who typically stand to receive benefits worth far less than the pension contributions made on their behalf. The most prominent alternative to a traditional DB pension plan is the defined contribution (DC) model. Under DC plans, an employee builds up an individual retirement account through her or her employer's regular contributions throughout her career and exercises some control over how the account is invested. Because the value of that account is tied directly to these contributions (and the performance of investments), DC plans, by definition, cannot be underfunded. Rapidvesting, portability, and the smooth accrual of benefits over time eliminate the problematic end-of-career incentives created by existing DB plans and could make teaching more attractive to young workers, possible career-switchers, or those likely to be geographically mobile.Finally, because benefits take the form of a personal account that can be converted into a lifetime annuity, the employee gains control over the timing and structure of her retirement benefit. An important potential drawback of the DC model is that employees, rather than taxpayers, bear the consequences if disappointing investment returns or poor withdrawal decisions yield inadequate retirement savings. Unions representing teachers and other public employees have vigorously opposed proposals to convert public pension plans to the DC model, largely on these grounds. Proponents of DB pensions cite survey data suggesting that public employees strongly prefer the DB model and contend that "when given the choice between a primary DB or DC plan, public employees overwhelmingly choose the DB pension plan."Yet there is reason to believe that many current and potential teachers could find well-designed DC plans as or more attractive than traditional DB plans. As noted above, DB plans typically provide minimal benefits to those who do not remain in the profession (and in the same state retirement system) for many years. They may therefore be unappealing to a younger generation of workers prone to exploring multiple career paths before settling on one. Other teachers may simply prefer to exercise greater control over their retirement savings, either due to confidence in their investment abilities or to doubts as to whether public pension funds will be able to deliver on their promises. Consistent with this logic, a survey of Washington State teachers found that a plurality of teachers would prefer to invest additional retirement savings in a DC plan rather than in a DB plan. The extent to which preferences expressed on surveys correspond to the actual behavior of teachers when given the option remains unclear.In this paper, we examine teacher preferences as revealed by their decisions when empowered to choose between alternative pension-plan structures. Since 2002, public school teachers (and most other state and local employees) in Florida have been permitted to choose between a traditional DB retirement plan and a new DC plan. During the time period of our study, school districts were required to contribute 9 percent of the salary of teachers taking the DC option to personalinvestment accounts in their names. Neither DB nor DC choosers were required to contribute from their own salaries to the retirement system, meaning that teachers' plan choice did not alter their take-home pay. The benefits of teachers choosing the DC plan vested after just one year, as compared with six under the DB plan

Generation Efficiencies for Propagating Modes in a Supersolid

Using Andreev and Lifshitz's supersolid hydrodynamics, we obtain the propagating longitudinal modes at non-zero applied pressure $P_{a}$ (necessary for solid 4He), and their generation efficiencies by heaters and transducers. For small $P_{a}$, a solid develops an internal pressure $P \sim P_{a}^2$. This theory has stress contributions both from the lattice and an internal pressure $P$. Because both types of stress are included, the normal mode analysis differs from previous works. Not surprisingly, transducers are significantly more efficient at producing elastic waves and heaters are significantly more efficient at producing fourth sound waves. We take the system to be isotropic, which should apply to systems that are glassy or consist of many crystallites; the results should also apply, at least qualitatively, to single-crystal hcp 4He.Comment: 10 pages. Accepted by Physical Review

Thermal Equilibration and Thermally-Induced Spin Currents in a Thin-Film Ferromagnet on a Substrate

Recent spin-Seebeck experiments on thin ferromagnetic films apply a temperature difference $\Delta T_{x}$ along the length $x$ and measure a (transverse) voltage difference $\Delta V_{y}$ along the width $y$. The connection between these effects is complex, involving: (1) thermal equilibration between sample and substrate; (2) spin currents along the height (or thickness) $z$; and (3) the measured voltage difference. The present work studies in detail the first of these steps, and outlines the other two steps. Thermal equilibration processes between the magnons and phonons in the sample, as well as between the sample and the substrate leads to two surface modes, with surface lengths $\lambda$, to provide for thermal equilibration. Increasing the coupling between the two modes increases the longer mode length and decreases the shorter mode length. The applied thermal gradient along $x$ leads to a thermal gradient along $z$ that varies as $\sinh{(x/\lambda)}$, which can in turn produce fluxes of the carriers of up- and down- spins along $z$, and gradients of their associated \textit{magnetoelectrochemical potentials} $\bar{\mu}_{\uparrow,\downarrow}$, which vary as $\sinh{(x/\lambda)}$. By the inverse spin Hall effect, this spin current along $z$ can produce a transverse (along $y$) voltage difference $\Delta V_y$, which also varies as $\sinh{(x/\lambda)}$.Comment: 14 pages, 7 figures, 1 tabl

Andreev-Lifshitz Hydrodynamics Applied to an Ordinary Solid under Pressure

We have applied the Andreev-Lifshitz hydrodynamic theory of supersolids to an ordinary solid. This theory includes an internal pressure $P$, distinct from the applied pressure $P_a$ and the stress tensor $\lambda_{ik}$. Under uniform static $P_{a}$, we have $\lambda_{ik} = (P-P_{a})\delta_{ik}$. For $P_{a} \ne 0$, Maxwell relations imply that $P \sim P_{a}^{2}$. The theory also permits vacancy diffusion but treats vacancies as conserved. It gives three sets of propagating elastic modes; it also gives two diffusive modes, one largely of entropy density and one largely of vacancy density (or, more generally, defect density). For the vacancy diffusion mode (or, equivalently, the lattice diffusion mode) the vacancies behave like a fluid within the solid, with the deviations of internal pressure associated with density changes nearly canceling the deviations of stress associated with strain. We briefly consider pressurization experiments in solid $^4$He at low temperatures in light of this lattice diffusion mode, which for small $P_{a}$ has diffusion constant $D_{L} \sim P_{a}^{2}$. The general principles of the theory -- that both volume and strain should be included as thermodynamic variables, with the result that both $P$ and $\lambda_{ik}$ appear -- should apply to all solids under pressure, especially near the solid-liquid transition. The lattice diffusion mode provides an additional degree of freedom that may permit surfaces with different surface treatments to generate different responses in the bulk.Comment: 10 pages. Accepted by Physical Review

Andreev-Lifshitz Supersolid Hydrodynamics Including the Diffusive Mode

We have re-examined the Andreev-Lifshitz theory of supersolids. This theory implicitly neglects uniform bulk processes that change the vacancy number, and assumes an internal pressure $P$ in addition to lattice stress $\lambda_{ik}$. Each of $P$ and $\lambda_{ik}$ takes up a part of an external, or applied, pressure $P_a$ (necessary for solid 4He). The theory gives four pairs of propagating elastic modes, of which one pair corresponds to a fourth-sound mode, and a single diffusive mode, which has not been analyzed previously. The diffusive mode has three distinct velocities, with the superfluid velocity much larger than the normal fluid velocity, which in turn is much larger than the lattice velocity. The mode structure depends on the relative values of certain kinetic coefficients and thermodynamic derivatives. We consider pressurization experiments in solid 4He at low temperatures in light of this diffusion mode and a previous analysis of modes in a normal solid with no superfluid component.Comment: 8 pages. Accepted by Physical Review

Analyzing spacecraft configurations through specialization and default reasoning

For an intelligent system to describe a real-world situation using as few statements as possible, it is necessary to make inferences based on observed data and to incorporate general knowledge of the reasoning domain into the description. These reasoning processes must reduce several levels of specific descriptions into only those few that most precisely describe the situation. Moreover, the system must be able to generate descriptions in the absence of data, as instructed by certain rules of inference. The deductions applied by the system, then, generate a high-level description from the low-level evidence provided by the real and default data sources. An implementation of these ideas in a real-world situation is described. The application concerns evaluation of Space Shuttle electromechanical system configurations by console operators in the Mission Control Center. A production system provides the reasoning mechanism through which the default assignments and specializations occur. Examples are provided within this domain for each type of inference, and the suitability is discussed of each toward achieving the goal of describing a situation in the fewest statements possible. Finally, several enhancements are suggested that will further increase the intelligence of similar spacecraft monitoring applications

Do More Effective Teachers Earn More Outside of the Classroom?

We examine earnings records for 90,000 classroom teachers employed by Florida public schools between the 2001–02 and 2006–07 school years, roughly 20,000 of whom left teaching during that time. Among grade 4–8 teachers leaving for other industries, a 1 standard deviation increase in estimated value-added to student achievement is associated with 6–9 percent higher earnings outside of teaching. The relationship between effectiveness and earnings is stronger in other industries than it is for the same teachers while in the classroom, suggesting that existing compensation systems do not account for the higher opportunity wages of effective teachers.