Are pension costs for teachers a big expense for Arlington?
No. It’s important to first understand that public employees in Massachusetts do not participate in the Social Security retirement system, saving taxpayers from having to pay 6.2 percent of payroll into that system. Next, many people don’t realize that the Town pays nothing toward teacher and administrator pensions. What’s more, teachers and administrators fund more than 90 percent of the costs of their own pensions by paying 11 percent of their salaries into the Massachusetts Teachers Retirement System. The state contributes to the MTRS, but much less than if these educators were in Social Security. The rest of the funds come from investment returns, which have averaged over 9 percent a year since the MTRS was created.
