Are California Teachers Better off with a Pension or a 401(k)

UC Berkeley Study: Are California Teachers Better off with a Pension or a 401(k)?


Research from University of California, Berkeley shows that for the vast majority of teachers, the California State Teachers’ Retirement System Defined Benefit pension provides a higher, more secure retirement income compared to a 401(k)-style plan.

The study, conducted by Nari Rhee, PhD, of the UC Berkeley Center for Labor Research and Education and William Fornia, FSA, of Pension Trustee Advisors, shows that switching to an account-based retirement system—such as a 401(k) or cash balance plan—would sharply reduce the retirement income security of teachers who account for a large majority of the educational workforce in California.

Published February 2016.

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General Information

Key Findings

Study's key findings show pensions benefit a long-term educator workforce: Three-quarters of classroom teaching in California is performed by long-term teachers, Age at retirement with around 29 years of service is 61, 75% of active educators will have worked at least 20 years, 49% of educators will retire with 30 or more years of service.


  • For six out of seven teachers, or roughly 86 percent of CalSTRS members, the defined benefit pension provides a greater, more secure retirement income than compared to a 401(k)-style plan. 
  • A typical classroom teacher today can expect to retire from their career at approximately age 61, and nearly half of teachers (49%) will retire with 30 or more years of dedicated service.
  • Three-quarters of classroom teaching is performed by teachers who will have been covered by CalSTRS for at least 20 years by the time they depart.


Past Studies