How We Estimated the Teacher Pension Gap

This is not a figure pulled from a single study. It's a bottom-up estimate built from publicly available data on teacher workforce size, attrition rates, contribution rates, vesting requirements, and refund behavior. Below is the methodology, including every assumption and source, so you can evaluate it yourself.

The core question

When a teacher leaves public education before vesting in their state's pension system, their mandatory employee contributions remain in the fund. They're legally entitled to a refund of those contributions — sometimes with modest interest — but the process requires state-specific paperwork, and many teachers never complete it. How much of that money is sitting unclaimed?

Building the estimate

Step 1: How many teachers leave each year?

There are approximately 3.5 million public school teachers in the United States. According to the NCES Teacher Follow-up Survey, 8% of public school teachers leave the profession each year — a rate that held steady even through the pandemic. That's roughly 280,000 teachers per year exiting the profession.

Step 2: How many leave before vesting?

Not all 280,000 annual leavers have unclaimed contributions. Some have vested and will collect a pension at retirement age. Some taught in states with short vesting periods and crossed the threshold. The question is what share leaves before vesting.

Vesting periods vary by state. According to Equable Institute, the average vesting period for teacher pension plans is 6.4 years. Fifteen states require 10 years of service to vest, 26 require 5 years, and 8 require fewer than 5 years. According to Reason Foundation analysis of 12 state pension systems, approximately 62% of new hires leave before vesting in their pension benefits.

However, that 62% figure applies to new hires, not to the annual leaver population (which includes veteran teachers retiring). For our estimate, we use a more conservative figure: 50% of annual leavers depart before vesting, or roughly 140,000 teachers per year in a normal year.

Step 3: How much does each teacher leave behind?

Mandatory employee contribution rates range from 5% to 11% of salary depending on the state, with most states falling in the 7–9% range. The national average teacher salary is approximately $62,000 as of 2025, but the population we care about — early-career leavers — earns less, typically $45,000–$55,000.

We use a blended average of $50,000 salary and 8% contribution rate for a typical pre-vesting leaver. With an average tenure of approximately 3 years before departure, that yields roughly $12,000 per teacher in accumulated contributions.

Step 4: How many teachers actually claim their refunds?

This is the least well-documented variable — no national database tracks pension refund claim rates. Based on our direct experience working with former teachers and outreach across Teach For America alumni networks, we estimate that roughly 50% of eligible former teachers never reclaim their contributions. The consistent pattern we observe is "awareness without action" — people know the money exists but the bureaucratic friction (state-specific forms, notarization requirements, employer certification, physical mail) keeps it on the back burner indefinitely.

We apply this 50% non-claim rate to the most recent cohort of leavers and reduce it for older cohorts to reflect that some portion eventually acts.

Step 5: The 20-year lookback with declining propensity

Unclaimed contributions don't just accumulate from one year — they build over decades. However, the propensity to have unclaimed, refundable money decreases the further back we look, for two reasons: (1) some teachers eventually do claim refunds over time, and (2) teachers who have been in the system longer may have crossed vesting thresholds and prefer to wait for a pension benefit rather than take a lump-sum refund.

The psychological dynamic matters: the closer a teacher gets to retirement age, the more likely they are to hold out for pension benefits, even if the math doesn't favor it. Contributions from teachers who left recently — especially the post-COVID wave — are far more likely to be sitting untouched.

We model four cohort windows:

Period	Non-vested leavers/yr	Unclaimed rate	Avg. balance	Subtotal
2021–2026 (post-COVID)	~160,000*	50%	$12,000	$4.8B
2016–2021	~140,000	40%	$12,000	$3.4B
2011–2016	~140,000	30%	$10,800	$2.3B
2006–2011	~140,000	20%	$10,000	$1.4B
Gross total				~$11.9B

*The 2020–2023 period saw elevated teacher attrition. According to BLS data, approximately 300,000 public school teachers and staff left education between February 2020 and May 2022 alone. McKinsey found that 2020 saw the highest annual rate of teacher attrition in a decade, with separations increasing 20% from 2019 to 2020. We adjust the recent cohort to 160,000 non-vested leavers annually to reflect this spike.

Step 6: Adjustments

The gross figure overstates the true current stock for several reasons:

• Some states pay interest on contributions, modestly inflating balances (typically 1–3% annually). This partially offsets the next adjustment.
• Some "unclaimed" balances will eventually be claimed. Our non-claim rates already account for this by cohort, but there's additional uncertainty in the older cohorts.
• Some teachers who "left" may return to teaching in the same state and reclaim their service credit rather than taking a refund.
• Private school teachers (about 12% of the workforce) may not be in state pension systems.

Applying a net adjustment of roughly 30% downward from the gross figure, we arrive at our headline estimate:

What this estimate does and doesn't capture

Included: Mandatory employee contributions from teachers who left public education before vesting and have not requested a refund.

Not included: Employer contributions (which are typically not refundable to non-vested members); contributions from non-teacher school employees (administrators, support staff); contributions from teachers who vested but whose accumulated pension benefits may be worth less than their contributions; or any estimate of foregone investment growth on these contributions.

If we included foregone growth — the returns these contributions could have earned in an IRA — the effective cost to former teachers would be substantially higher than $8.3 billion.

A note on precision

This is an estimate, not an audit. State pension systems do not publish refund claim rates in a standardized way, and there is no national dataset tracking unclaimed teacher contributions. Our methodology relies on reasonable assumptions applied to publicly available federal data. The true figure could be higher or lower, but we believe $8.3 billion represents a defensible and likely conservative estimate of the current stock of unclaimed teacher pension contributions in the United States.

We welcome scrutiny of these assumptions. If you work for a state pension system, a teachers' union, or a research organization and have data that would improve this estimate, please contact us.

Why this matters

Approximately 77% of public school teachers are women. The overwhelming majority of the $8.3 billion in unclaimed pension contributions belongs to women — many of whom left teaching to raise families, pursue other careers, or relocate with a spouse. Recovering this money and rolling it into individual retirement accounts helps close the gender retirement savings gap one teacher at a time.