Teacher Pensions: A Background Paper is as straightforward as its title. In it, Janet S. Hansen presents a brief history of U.S. pensions, the current financial state of the nation's various teacher pension programs and a look at the ways they disadvantage teachers who move or spend less than a full career in teaching. Her good news: about half of the nation's teachers' pension funds are at least 80 percent funded. Her bad news: about half are not, including a few that are funded below 60 percent. Further, these funding levels reflect 2006 data before the market downturn of 2007-08.

Most public and private sector plans choose between a defined benefit (DB) plan and a defined contribution (DC) plan. A DB plan's payout is a guaranteed amount usually per month based on years of service and final salary. A DC plan's payout is dependent on employer and employee contributions and earnings made from investments. Over the last 30 years, private sector provision of DC plans has increased from 38 percent to 90 percent.

Not so in the public sector. More bad news: No teacher pension fund has a DC plan as its default primary plan, even those in which participants contribute to Social Security. A handful of states are moving in the right direction providing "hybrid plans" or allowing teachers to choose between a DB and DC plan. Hansen describes alternatives to the current public sector dependence on DB plans, mere mention of which is considered heretical in some circles. Differential pay is getting all the sun, but teacher pension reform may be the beginning of better teacher recruitment, placement and retention. Hansen at least begins to pull back the curtains.