Gov. Ned Lamont has laid out plans to convene a Blue Ribbon Commission on K-12 Education to look under the hood of public school funding and resourcing in Connecticut.

There is a $1.7 billion dollar annual education expense that should not be left out of these considerations: teacher retirement benefits.

My work at the nonprofit, bipartisan Equable Institute focuses on the intersection of public sector retirement systems and public policy, including in education. Over the past several years, Equable has been researching Connecticut’s Per Pupil Pension Subsidy, an equity metric that identifies how much the state spends per student in each public school district when it makes an annual contribution to the Connecticut State Teachers’ Retirement Board (TRB).

It turns out, the way Connecticut finances TRB has a significant effect on school funding allocations by the state, and resource equity for students.;

Teachers earn their retirement dollars based upon a formula that incorporates their tenure and salary. This locally accrued cost is then covered by the State of Connecticut.

Wealthier, often less diverse, communities can afford bigger salaries, so their teachers accumulate higher pensions. But even though salaries are locally set, the State pays for the employer portion of retirement costs year-over-year.

For every pupil in Greenwich, where the average salary is roughly $109,000, the State contributes $4,375 to the Teacher Retirement System —while it sends TRS only $2,208 per Waterbury student, where the average teacher salary is about $75,000.

That’s a nearly 50% larger pension subsidy —largely because Greenwich’s teacher pay is significantly higher to begin with, which helps them to also retain teachers longer (a key factor in earning better pensions).

Connecticut is an outlier among states when it comes to teacher pension financing: most integrate retirement costs into their education funding formulas. Although Connecticut’s spending on teacher retirement represents one quarter of all K-12 education allocations in the biennium budget —or nearly $1.7 billion in 2026— those costs are not consolidated into calculations of state education spending.

Instead, for nearly a century, the state has paid all of the costs of providing teacher retirement benefits separately.

As a result, even though Connecticut annually addresses resource equity through adjustments to its school funding formula, the state’s separate allocations toward teacher retirement continue to compound classroom inequities. The data clearly illustrates this disparity:;

• Connecticut sets aside lower Per Pupil Pension Subsidies on behalf of districts that are poorer, spending at less than half the rate for students from low-income families.
• The Per Pupil Pension Subsidy is distributed at less than half the rate for students of color versus white students.;
• And the Per Pupil Pension Subsidy is a 28% larger rate for students in the highest-performing districts, as compared to districts with lower performance.

In other words, this subsidy creates a competitive downside for the very districts that are already the most disadvantaged —those that teach students with the greatest needs.

Addressing a challenge as systemic as teacher pension funding requires bold leadership and principled plans to ensure that teacher retirements remain fully funded, while also making sound administrative choices that ensure the state’s laws and policies aren’t competing against themselves.

If retirement benefits are a part of the local compensation packages offered by districts competing to hire high-quality educators, then at least some portion of the resultant retirement costs should be borne by some municipalities. It appropriately aligns incentives and focuses the role of a state subsidy on covering unfunded liabilities instead of letting the subsidy give better resourced districts a competitive advantage.

A strong policy solution should be guided by four principles: First, prioritize education funding holistically by including pension benefit financing as part of any state education funding consideration. Second, require districts to contribute toward pension costs, but protect the highest-need districts from having to start paying these rates until there is an equitable distribution of resources. Third, the state should continue to assume all or the vast majority of unfunded liability costs so these expenses do not get pushed down to the district level, furthering the strain on education dollars. And finally, phase in whatever the ultimate policy choice is to limit the burden on districts who might have to cover a portion of costs associated with paying higher salaries.

Governor Lamont and leaders in the Connecticut General Assembly have been adjusting and improving the way we fund public education for nearly a decade. But there is no meaningful solution to addressing inequity without considering the one quarter of all education spending every year on TRB, the unfairness of the Per Pupil Pension Subsidy, and its pronounced impact on students.

If we truly want to make systemic change, and not tinker around the edges, let’s make sure this issue is at the top of the Blue Ribbon Commission’s agenda this year.

Anthony Randazzo is executive director at Equable Institute and presented these findings at the Moving Beyond Implications Conference, hosted by UConn’s InCHIP and the Connecticut Scholars Strategy Network in January 2026.