Compensation - Fringe Benefits

Benefit packages coupled with salary are part of the full picture of the teacher compensation package. Benefits generally include insurance (health, dental, vision, and life) and pension plans.

In general states tend not to address insurance benefits in labor statutes, but do tend to address pension plans (with the exception of a few large cities that use their own pension plans). The vast majority of state teacher pensions are defined benefits, whereby teachers are guaranteed a percent of their salary which varies based on the state, years of service and age at retirement. For more information about pension plans, see the state policy issue page.

Insurance benefits are either set or negotiated at the district level and there is a broad range in packages offered among districts. Most districts offer employees some choice regarding health insurance, whether among carriers, plan designs or both. The total price of the premiums varies widely from district to district, as does the ratio of employer to employee contributions to the premium.

Other common fringe benefit s are tuition reimbursement, which can take the form of direct reimbursement or loan forgiveness, and reimbursement of National Board Certification fees.

Teacher Contract Database In examining teacher benefits, our database highlights health insurance and retirement plans. While the database does not review the details of the plan designs of the various health insurance policies offered to teachers in individual districts, it does address basic information such as whether or not insurance benefits are available at no cost to the teacher. The database includes information on plan structure, contributions and more specific details including vesting requirements and the teacher's ability to purchase service credit.

What the research shows

A significant difference between teacher and private sector compensation packages is the generous benefits afforded to teachers, often at little or no cost to the employee. In Michael Podgursky's report, Fringe Benefits, he writes that there is more to teacher compensation than their salaries (2003). He cites that the largest fringe benefit cost, as a percentage of payroll, is retirement plans followed by health insurance. According to data from the Bureau of Labor Statistics available in 2003, health insurance benefits amount to 7.1 percent of hourly compensation costs for teachers but only 5.1 percent for professionals in private business. Further, only 20 percent of health insurance plans for professional or managerial employees in private sector firms are fully paid by the employer as compared to teachers in which 51 percent are covered at no cost to the employee (Podgursky, 2003).

Works Cited

Podgursky, Michael. "Frinqe Benefits." Education Next (2003).