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When asked what kind of future they desire for their children, parents often mention the importance of graduating from school and obtaining a “good job.” But what makes a job a good job? A living wage is a big part of the answer to that question, but a living wage alone isn’t sufficient. Benefits, such as vacation time, sick leave, and health insurance, are an important part of what makes a job desirable. A retirement plan is another benefit seen as essential for making a job desirable because it allows for the peace of mind of knowing that there will be financial security once one’s working days end.

It’s no secret that early educators generally earn low wages compared to other professions. Nationally, early educators earned an hourly median wage of compared to $31.80 for elementary and middle school teachers. And retirement is often just a distant dream for these educators. When surveyed in 2012 and 2013, in one state expressed concern about having enough money to eventually retire. A found that just about half of lead teachers and program directors in the state’s center-based child care settings have money set aside for retirement, with only about 20 percent of home-based providers saying the same. The lack of retirement funds for early educators is especially concerning given the fact that many members of the workforce are close to traditional retirement age. While about 26 percent of center-based workers are over the age of 50, of home-based workers have reached that age, meaning that setting aside funds for retirement is an especially urgent issue for these workers.

The issue of retirement security for early educators is one facing every state in the country. As part of their successful efforts to unionize the state’s home-based child care providers, California unions secured a commitment from the state for to establish a first-of-its-kind retirement fund. The vast majority of the nation’s early education workforce is , however, making it difficult to replicate that sort of success. Even when retirement plans are established, the low pay of early educators makes it difficult for individuals to regularly contribute. For example, despite a large, center-based program in Philadelphia offering a retirement plan with an employer match, had opened an account and many of those still were not actually contributing money to the account.

The same issues of low pay and poor benefits that impact the early educator workforce nationally are playing out in Arkansas. Arkansas early educators earned a median hourly wage of just , below the national average. A , however, promises to make it easier for the state’s early educator workforce to begin putting money away for retirement. Prior to the passage of the law, only an early educator employed by a public school district was eligible to participate in the , a defined benefit retirement plan established for public school and other public education employees in the state. The new law means that any early educator who is licensed by the state and receives state or federal child care funding is eligible to participate, including those working in child care centers and home-based programs. “It's something that's been talked about for a while, and it always felt like for people it was low hanging fruit,” says Angela Duran, executive director of , a network of individuals and organizations focused on increasing Arkansas children’s health and education outcomes. “Having early educators in the Teacher Retirement System serves a couple of purposes. One is categorizing them as educators, which says a lot for the field and the importance of the field. Another piece of it is the Teacher Retirement System is done well. It's very credible. Early educators don't have to go do their homework to figure out if this is a good advisor.”

Specific regulations are still being created to aid implementation of the law, but the retirement plan generally works this way: employers who choose to opt in 15 percent of an educator’s salary while the educator herself will contribute 7 percent. The funds are then in a diversified mix of stocks and fixed assets. After five years of service educators are considered “vested” and will be eligible to apply for a retirement annuity.

While the new law is a positive first step for Arkansas’ early educator workforce, it remains to be seen how many will take advantage of the new option since it will require both employers and employees to set aside excess funds that they might not have. “Having some type of state funding attached would have taken it a step further so that there would be that extra state investment. But that would have been much harder to pass the legislature,” says Nicole Carey, education policy director at , a nonprofit child advocacy organization.

Recent actions taken by the state might make it easier for early educators to begin contributing towards the plan, however. In January 2024 the state that it was expanding its Child Care Assistance Program by waiving income guidelines and allowing eligible early educators to participate, potentially allowing the educators to lower their own child care expenses. The state has also made , adding higher payment rate tiers for new quality levels in July 2023 and increasing payment rates again in October 2024.

Time will tell whether these changes enable early educators to begin setting some money aside to provide for a secure retirement. Once regulations are finalized, it will be important for advocates to share information with providers about the benefits of signing up and contributing to the plan. “This could be a really positive thing to allow child care workers to participate in teacher retirement, especially in rural communities…Will this result in child care providers helping to get their employees this type of retirement? We’re going to have to wait and see,” says Carey.