A Method for Identifying Salary Spiking: An Assessment of Pensionable Compensation and Reform in Illinois. Working Paper No. 238-0620

Autor/inn/en	Goldhaber, Dan; Grout, Cyrus; Holden, Kristian
Institution	National Center for Analysis of Longitudinal Data in Education Research (CALDER) at American Institutes for Research
Titel	A Method for Identifying Salary Spiking: An Assessment of Pensionable Compensation and Reform in Illinois. Working Paper No. 238-0620
Quelle	(2020), (30 Seiten) PDF als Volltext kostenfreie Datei Verfügbarkeit
Sprache	englisch
Dokumenttyp	gedruckt; online; Monographie
Schlagwörter	Retirement Benefits; Teacher Retirement; Teacher Salaries; Incidence; Compensation (Remuneration); Finance Reform; Financial Policy; State Policy; Public School Teachers; Illinois + Suchen Sie Ihr Suchwort? Retirement pay; Ruhegehalt; Lehrerbesoldung; Lehrervergütung; Vorkommen; Abfindung; Kompensation; Lohnausgleich; Financial reform; Finanzreform; Fiscal policy; Finanzpolitik
Abstract	Defined benefit (DB) pension systems determine the size of pension payments using an employee's "final average salary". Thus, employees enrolled in DB pension systems face an incentive to "salary spike" -- strategically increase late career pensionable compensation -- to increase their retirement income. This is an important issue given that public pension systems face increasing scrutiny due to ongoing concerns about their fiscal sustainability. This paper develops an empirical method to quantify the prevalence of salary spiking by identifying cases where end-of-career compensation deviates from expected levels of compensation. We apply this method to the teacher pension systems in Illinois and examine how salary spiking changed in response to policy reform. The results suggest that salary spiking is very common, with about half of late career employees observed as having pensionable compensation that exceeds expectations. Policies designed to dissuade salary spiking by internalizing its costs across districts appear to reduce the prevalence of salary spiking, but there may be unintended consequences for individuals who are "not actually spiking," as such discouraging the assignment of supplementary responsibilities to late career employees. (As Provided).
Anmerkungen	National Center for Analysis of Longitudinal Data in Education Research. American Institutes for Research, 1000 Thomas Jefferson Street NW, Washington, DC 20007. Tel: 202-403-5796; Fax: 202-403-6783; e-mail: info@caldercenter.org; Web site: https://caldercenter.org
Erfasst von	ERIC (Education Resources Information Center), Washington, DC
Update	2024/1/01