How state pension plans differ
Every state runs at least one retirement system for teachers and another for state and local employees, and large cities often run their own. Most use the same basic formula, a multiplier times years of service times final average salary, but the multiplier ranges from about 1.5% to 2.5%, the salary average can cover three to eight years, and the age when the benefit stops being reduced runs from the mid-50s to 67.
Two other differences matter as much as the formula. About a dozen states have teachers who do not pay into Social Security, and their pensions are larger to make up for it. And cost-of-living increases range from automatic yearly raises to none unless the legislature acts. Each plan page covers both, and we add new plans every week.