First Person

Voices: Why PERA's presumptions are faulty

Joshua Sharf, of the Independence Institute, offers a counterpoint to an earlier EdNews Voices post by PERA Executive Director Gregory Smith in which Smith defends Colorado’s public retirement system. 

Did you recognize the faulty presumptions in PERA’s spirited defense of defined benefit plans?

You have been given a false choice about why defined benefits plans are better than defined contribution plans.Image of school desk atop a dollar bill.

In a recent EdNews Colorado Voices column, Colorado PERA Executive Director Greg Smith avers that PERA’s existing defined benefit structure best serves both the teachers and the taxpayers of Colorado. He was responding to a report by the National Council on Teacher Quality that leads the reader to support reforms to move away from the existing scheme and toward a defined contribution plan. Smith’s claims are wrong about the advantages of defined benefit plans in general, and PERA’s actuarial soundness in particular.

Smith cites a National Institute on Retirement Security (NIRS) report that claims three advantages for defined benefit plans over defined contribution plans:

  1. Less error in the amount saved for retirement,
  2. Less need to rebalance and re-allocate assets over time, and
  3. Better returns, largely as a result of lower transaction costs.

Each advantage turns out not to be dependent on having a defined benefit plan, but on having a professionally-managed, aggregated plan. The same advantages would accrue to a similar defined contribution plan that was also aggregated and professionally-managed.

PERA already has such an option, PERA Plus. It’s organized as a three-part 457(b) / 401(k) / Defined Contribution option. Like any set of diversified retirement offerings, it includes a variety of funds with different investment goals. For our discussion, the most relevant set of funds are those with target retirement dates. PERA has nine of these, with target dates every five years from 2015 to 2055, and an Income Fund designed to provide current income for current retirees.

Over time, as the target date for each fund approaches, that individual fund reallocates its assets into more conservative investments, before maturing and merging into the Income Fund. While each individual fund “ages,” all the funds collectively are maintaining a proper average. Taken together, they continue to represent the aggregate ages and target retirement dates of the entire set of members, the very source of the first two alleged advantages. The third, that of lower transaction costs, is completely independent of how liabilities are calculated.

There is no inherent reason why the assets of a DB plan should earn a higher return than those of an identically-invested DC plan.  The only mandatory difference is that the defined benefit plan beneficiary has a share only in the specific benefits to be paid – the fund’s liabilities. By comparison, the owner of a defined contribution plan has a property right in the assets. Therefore, while a defined contribution plan is, by definition, always fully-funded, a defined benefit plan may have to seek additional funding, or trim back on its promises, in order to remain so.

The danger of unrealistic promises

It is therefore imperative that the promises being made to future retirees be realistic. All the more so if the promised benefits are being used to attract and retain qualified or exceptional teachers. Unfortunately, it is far from certain that PERA can afford the promises it is making, given its current funding levels.  Recent legislative reforms (Senate Bill 10-001 in particular), while welcome and substantial, simply do not close the gap.

By PERA’s most recent published calculations, its unfunded liabilities remain at a staggering $26 billion, and its overall funded level is well below 60 percent, on a par with the chronically ill Illinois public pensions. In fact, a recent study by Barry Poulson suggests that PERA could be in the worst shape of any statewide plan in the country.

Let’s give credit where credit is due. PERA’s adoption of a 401(k)-like portability is indeed commendable. But if it’s designed to mimic the properties of a 401(k), it can hardly then provide an advantage over one.

While PERA is no longer “letting it ride,” as it did with its stock market investments of the late 90s, the 8 percent returns needed for a return to solvency come with risk. Even better-than-average returns during regular years won’t make up for prior losses in bad years, because funds must then catch up, while payments can’t be deferred.

What success SB1 does offer is predicated on both benefit reductions and payment increases. However, a court challenge to the limitation of COLAs to 2 percent has been upheld by a State Court of Appeals, and its future is uncertain at best. Should the lower courts find that limitation not to be justified, most of the immediate reduction in PERA’s unfunded liability will be wiped out.

On the contribution side, PERA plans to require supplemental increases, rising incrementally from 2 percent to 5.5 percent until 2018.  School districts have been picking up the tab for these increases, rather than passing them on to the teachers themselves, as they are allowed to do.  As a result, PERA now absorbs upwards of 15 percent of annual operating expenses in many large school districts, a number that is expected to rise to 20 percent as the existing plan increases for make-up contributions.

Disclosure of ties to lobbying group needed

It is also worth noting that the institute that issued the favorable DB article (NIRS) is the lobbying and public policy arm of the defined benefit public pensions, with a particularly close relationship with Colorado PERA.  Smith sits on the board of directors of NIRS, as does Meredith Williams, PERA’s former executive director.  Colorado PERA is both a charter member and in NIRS’s Visionary Circle, along with such other public plans as CalPERS and the Illinois Municipal Retirement Fund.

Inasmuch as NIRS is not an independent think tank, but instead is a creation of interested parties to the debate over public pensions, this relationship ought to have been disclosed.

While there is no doubt that total compensation is an important part of attracting and retaining effective teachers, those promises must be grounded in reality. Until realistic arguments are used, PERA will continue to fail not only its member teachers, but also the schools and parents it is intended to serve.

First Person

Why the phrase ‘with fidelity’ is an affront to good teaching

PHOTO: Alan Petersime

“With fidelity” are some of the most damaging words in education.

Districts spend a ton of money paying people to pick out massively expensive, packaged curriculums, as if every one of a thousand classrooms needs the exact same things. Then officials say, over and over again, that they must be implemented “with fidelity.” What they mean is that teachers better not do anything that would serve their students’ specific needs.

When that curriculum does nothing to increase student achievement, it is not blamed. The district person who found it and purchased it is never blamed. Nope. They say, “Well, the teachers must not have been implementing it with fidelity.”

It keeps happening because admitting that schools are messy and students are human and teaching is both creative and artistic would also mean you have to trust teachers and let them have some power. Also, there are some really crappy teachers out there, and programs for everyone are often meant to push that worst-case-scenario line a little higher.

And if everyone’s doing just what they’re supposed to, we’ll get such good, clean numbers, and isn’t that worth a few thousand more dollars?

I was talking with a friend recently, a teacher at an urban school on the East Coast. He had been called to task by his principal for splitting his kids into groups to offer differentiated math instruction based on students’ needs. “But,” the principal said, “did the pacing guide say to differentiate? You need to trust the system.”

I understand the desire to find out if a curriculum “works.” But I don’t trust anyone who can say “trust the system” without vomiting. Not when the system is so much worse than anything teachers would put together.

Last year, my old district implemented Reading Plus, an online reading program that forces students to read at a pace determined by their scores. The trainers promised, literally promised us, that there wasn’t a single reading selection anywhere in the program that could be considered offensive to anyone. God knows I never learned anything from a book that made me feel uncomfortable!

Oh, and students were supposed to use this program — forced-paced reading of benign material followed by multiple-choice questions and more forced-pace reading — for 90 minutes a week. We heard a lot about fidelity when the program did almost nothing for students (and, I believe quite strongly, did far worse than encouraging independent reading of high-interest books for 90 minutes a week would have done).

At the end of that year, I was handed copies of next year’s great adventure in fidelity. I’m not in that district any longer, but the whole district was all switching over to SpringBoard, another curriculum, in language arts classes. On came the emails about implementing with fidelity and getting everyone on the same page. We were promised flexibility, you know, so long as we also stuck to the pacing guide of the workbook.

I gave it a look, I did, because only idiots turn down potential tools. But man, it seemed custom-built to keep thinking — especially any creative, critical thought from either students or teachers — to a bare minimum.

I just got an email from two students from last year. They said hi, told me they missed creative writing class, and said they hated SpringBoard, the “evil twin of Reading Plus.”

That district ran out of money and had to cut teachers (including me) at the end of the year. But if they hadn’t, I don’t think I would have lasted long if forced to teach from a pacing guide. I’m a good teacher. Good teachers love to be challenged and supported. They take feedback well, but man do we hate mandates for stuff we know isn’t best for the kids in our room.

Because, from inside a classroom full of dynamic, chaotic brilliance;

from a classroom where that kid just shared that thing that broke all of our hearts;

from a classroom where that other kid figured out that idea they’ve been working on for weeks;

from that classroom where that other kid, who doesn’t know enough of the language, hides how hard he works to keep up and still misses things;

and from that classroom where one kid isn’t sure if they trust you yet, and that other kid trusts you too much, too easily, because their bar had been set too low after years of teachers that didn’t care enough;

from inside that classroom, it’s impossible to trust that anyone else has a better idea than I do about what my students need to do for our next 50 minutes.

Tom Rademacher is a teacher living in Minneapolis who was named Minnesota’s Teacher of the Year in 2014. His book, “It Won’t Be Easy: An Exceedingly Honest (and Slightly Unprofessional) Love Letter to Teaching,” was published in April. He can be found on Twitter @mrtomrad and writes on, where this post first appeared.

First Person

What I learned about the limits of school choice in New York City from a mother whose child uses a wheelchair

PHOTO: Patrick Wall

As a researcher interested in the ways online platforms impact learning and educational decision-making, I’ve been trying to understand how New York City parents get the information to make a crucial decision: where to send their children to school.

So for the past six months, I’ve been asking local parents about the data they used to choose among the system’s 1700 or so schools.

I’ve heard all sorts of stories about the factors parents weigh when picking schools. Beyond the usual considerations like test scores and art programs, they also consider the logistics of commuting from the Bronx to the East Village with two children in tow, whether the school can accommodate parents and children who are still learning English, and how much money the parent-teacher association raises to supplement the school’s budget.

But for some families, the choice process begins and ends with the question: Is the building fully accessible?

The federal Americans with Disabilities Act requires public buildings constructed after 1992 to be fully accessible to people in wheelchairs. However, most New York City public school buildings were constructed prior to that law, and high construction costs have limited the number of new, fully accessible buildings.

As a result, a shocking 83 percent of New York City schools have been found non-compliant with the ADA, according to a two-year federal Department of Justice investigation whose findings the city Department of Education largely disputes. Recently, the city’s Office of Space Management has begun surveying buildings for full accessibility, but more work remains to be done.

One parent’s struggle to find a school suitable for her son, who has a physical disability but no cognitive issues, illustrates what a major role accessibility plays in some families’ decision-making.

Melanie Rivera is the mother of two and a native New Yorker living in Ditmas Park in Brooklyn’s District 22 who shared her story with me — and gave me permission to share it with others. Here is what she told me, in her own words:

My son Gabriel is seven years old. He was born with a condition called arthrogryposis, which affects the development of his joints. His hips, knees, and feet are affected and he has joint contractures, so his legs don’t bend and straighten the way most people’s do. In order to get around, he uses a combination of crutches and a wheelchair.

Before I had my differently-abled son, I was working in a preschool for children with special needs. The kids I worked with had cognitive developmental disabilities.

Despite my professional experience, I was overwhelmed when it was my turn to help my child with different abilities navigate the public school system. I can only imagine the students falling by the wayside because their parents don’t have that background.

When I was completing my son’s kindergarten application, I couldn’t even consider the academics of the school. My main priority was to tour the schools and assess their level of accessibility.

There are only a couple of ADA-accessible schools in my district, and there was no way of indicating on my son’s kindergarten application that he needed one. When we got the admissions results, he was assigned to his zoned school – which is not accessible.

I entered lengthy and extensive mediation to get him into an ADA-accessible school. At that point, I knew I would just have to take what I could get. For families whose children have special needs, “school choice” can ring hollow.

The process of finding any accessible school was a challenge. The DOE website allows families to search for ADA-accessible schools. But the site describes most schools as “partially accessible,” leaving it up to parents to call each school and say, “What do you mean by this?”

When I called the schools and asked, “Are you a barrier-free school?” the staff in the office didn’t know what the term meant. They might reply, “Oh yeah, we have a ramp.” I’d have to press further: “But can you get to the office? Can you get to every floor in the building?” The response was often, “Oh, I don’t know.”

Even the office staff didn’t know. But for my son’s sake, I needed to know.

Gabriel deserves the full range of academic and social experiences. So every day I make sure he’s learning in the least-restrictive environment — from the classroom, to phys ed, to field trips.

I believe the Department of Education also wants to make schools accessible and to place students with different abilities in settings where they’ll flourish, but the current system is not equipped to follow through on those good intentions. While I see gradual changes, I still know that if I don’t find the best placement for my son the system definitely won’t.

At the school level, administrators should know the details of their own school’s accessibility. Teachers should learn to include children with different abilities in their classrooms. Such a commitment means recognizing the value of inclusivity — not viewing accessibility as something ADA says you must do.

Before I had Gabriel, I never thought about accessibility. I never looked at street cutouts or thought about how to enter a store with steps. We’re probably all guilty of perpetuating exclusion at one point or another.

Recognizing that will allow us to change the status quo. It will allow every individual with a physical disability to fully participate in the public school system.

Claire Fontaine is a researcher at Data & Society, a research institute in New York City focused on social, cultural, and ethical issues arising from technological development. Kinjal Dave is a research assistant at Data & Society. You can read more about their project, which seeks to better understand the ways in which diverse New York City parents draw on school performance data, online dashboards, and school review websites when researching schools for their children.