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The total unfunded liability of U.S. teacher pensions is currently anywhere from $390 billion to $1 trillion, according to recent estimates. In an effort to bolster depleting pension funds, some states are enacting laws that cut benefits and require more contributions from employees, according to a June report from the Thomas B. Fordham Institute, “The Big Squeeze: Retirement Costs and School District Budgets.”

The U.S. teacher pension system is in major financial trouble, with almost $390 billion in unfunded liabilities, according to a recent report from the National Council on Teacher Quality (NCTQ). And funding shortfalls grew in all but seven states between 2009 and 2012, the nonprofit research and policy group found.

In 2010, Attila J. Weninger was 61 and ready to retire. But he received a phone call. A recruitment firm hired by the Stevens Point (Wis.) Area Public School District called on Weninger to help the troubled district, which faced budget problems, vacancies in top cabinet positions, and two previously failed referendums.

In July, San Bernardino became the third city in California to file for bankruptcy. California isn’t alone, however. In Scranton, Pa., for example, the mayor made a bold move by paying the city’s workers minimum wage, prompting a universal “gulp” from public employees across the country.

Retirement options for teachers and other school district employees could previously be compared to the “wild, wild west,” says Bruce Corcoran, managing director of institutional development for the K12 market at TIAA-CREF, national financial services company serving educators and other non-profit workers. Since the 1960s, public school workers have had a plethora of retirement options through 403(b) plans, although teachers have recently begun relying on them heavily as their pensions continue to shrink.

It has been another tough spring for school districts across the nation. The economic crisis of the past two years is hitting school systems hard as districts plan for the 2010-2011 school year. State support to schools continues to decline, and the "soft landing" afforded by federal stimulus monies is a thing of the past. School districts must cut costs but find their options constrained by restrictive labor agreements in addition to the collective bargaining process itself. If ever there was a time for a new approach to bargaining, it is now.

As the superintendent of the St. Mary Parish (La.) Schools since 2004, Don Aguillard faces many fiscal challenges in overseeing the rural district’s 1,500 employees and 10,000 students. But for the 2010-2011 school year, a new and significant financial burden will be added to his annual budget. In an effort to make up a large funding shortfall, Louisiana’s two largest teacher retirement systems will be raising their required employer contribution rates, one from 15.5 percent of salary to 20 percent, the other from 17.6 percent to 24.3 percent.