MISSOURI CHARTER SCHOOLS AND TEACHER PENSION PLANS: How Well Do Existing Pension Plans Serve Charter and Urban Teachers? - Erratum - Correction concerning reciprocity between PSRS and KC

Oct 15, 2026

Uploaded by Jacob

Erratum clarifies statements in a report about reciprocity among three Missouri teacher pension plans, focusing on reciprocity between the Missouri Public School Retirement System (PSRS) and the Kansas City Public School Retirement System (KC). It explains that although a reciprocity agreement exists since 2008 (PSRS–KC) and since 2003 (KC–STL), transfers are not seamless. Educators still face pension credit losses, cash-value-based mobility taxes for promotion-related moves, and limitations from static pension-wealth calculations. The correction also summarizes evidence that few KC teachers transfer to other Missouri districts.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages3

Reading Time8 min

AccessFree to download

Erratum Overview

Correction on Reciprocity Between PSRS and KC

Reasons Transfers Still Trigger Pension Penalties

How the Reciprocity Agreement Works

Practical Implications from Retention Data

Erratum to MISSOURI CHARTER SCHOOLS AND TEACHER PENSION PLANS: How Well Do Existing Pension Plans Serve Charter and Urban Teachers? August 2014 Correction concerning reciprocity between the Missouri Public School Retirement System (PSRS) and the Kansas City Public School Retirement System (KC) . In our report we stated that there is no reciprocity between the three Missouri teacher pension plans, based on our understanding that employer contributions could not transfer between plans. That statement is correct concerning PSRS and the Public School Retirement System of the City of St. Louis (STL) . However, since 2008 there has been in place a reciprocity agreement between PSRS and KC, and since 2003 between KC and STL, both of which would permit some access to employer contributions. The purpose of this correction is to clarify how reciprocity works in Kansas City, focusing on the more empirically relevant issue of reciprocity between PSRS to KC. While our initial report was inaccurate in stating that there is not reciprocity between KC and PSRS, it is still the case that the substance of the concerns we raise in the initial report is relevant even with the reciprocity agreement in place. The reason is that the reciprocity is not seamless. Put differently, educators cannot move freely between the KC and PSRS plans like they can between districts that truly share the same plan. Rigidities in the transfer agreement are such that many educators will still face significant pension penalties in moving from Kansas City suburban districts (PSRS) to Kansas City Public Schools (KC) . The rigidities are more substantial moving from PSRS to KC, and for individuals who move with a promotion (e.g. , teacher to principal), which is the direction and type of mobility that is the focus in our report. The reciprocity agreement between PSRS and KC works as follows: If an educator moves from PSRS to KC, PSRS will credit her with the actuarial value of her pension at the time of separation and these funds can be used to purchase service years in the KC plan. The same option exists for an educator moving from KC to PSRS. Mobility penalties remain despite the reciprocity agreement for three reasons. First, the state statute does not permit an educator to buy more years in the receiving plan than she has already accumulated in the sending plan. However, as noted in our report, pension plan benefits for PSRS teachers are more generous than those in STL or KC. For a representative teacher with ten years of PSRS experience, a year in PSRS is worth about 1.25 years in KC. If this ten-year veteran moves to KC, she will thus lose the equivalent of roughly 2.5 years of pension credit—a large penalty. The second penalty is more subtle but can be important for leadership recruitment in Kansas City Public Schools. The cash value of the pension (pension wealth) calculated by the actuaries in the sending plan is based on pay and experience in the old position. The actuarial cost to buy service years in the receiving plan is based on the new salary. This is likely a negligible issue for an educator who moves from teaching in one plan to teaching in the other. However, for an educator who moves from teaching in one plan to a principal position in another, the corresponding salary increase creates an additional mobility tax. To see this, note that for a promoted individual who stays in PSRS (or any other final-average-salary defined-benefit plan) , the rules of the plan are such that the promotion produces a windfall gain. However, if the educator switches plans, the reciprocity agreement is such that the windfall is eliminated. The key point is that this penalty is triggered only if the educator switches plans. If the educator moves from a teacher to principal position within PSRS or KC, no penalty is incurred. Finally, these reciprocity agreements are based on static calculations of pension wealth, not future gains. As Figure 4 of our report i

FAQs

What does the erratum correct about the original report’s reciprocity claim?

The original report stated there is no reciprocity among Missouri teacher pension plans. The erratum clarifies that reciprocity agreements do exist between PSRS and KC (since 2008) and between KC and STL (since 2003).

Why do pension penalties still occur even when reciprocity agreements exist?

Reciprocity is not seamless. State rules limit how many years an educator can buy in the receiving plan, and mobility penalties persist because the transfer terms restrict equivalencies and can impose additional costs for certain transitions.

How does the PSRS-to-KC reciprocity agreement work for a moving educator?

If an educator moves from PSRS to KC, PSRS credits the educator with the actuarial value of the pension at separation, and those funds can be used to purchase service years in the KC plan. A similar option exists for moves from KC to PSRS.

Oct 15, 2026

Uploaded by Jacob