Green Room

Retired Teachers in California Earn More Than Working Teachers in 28 States

posted at 2:47 pm on March 30, 2011 by

I came across the most recent summary report for the California State Teachers’ Retirement System (CalSTRS) and I thought its pared-down tables and graphs nicely encapsulated the pension situation in the state.

First note that the average annual salary in 2010 for active working educators enrolled in the system was $64,156. The next table states that the average retirement benefit paid out in 2010 was $4,256 per month. That’s $51,072 annually. In other words, the average retired teacher in California made more than the average working teacher in 28 states, according to the salary rankings published by NEA.

The final graph in the report provides the big picture. While the value of the pension system’s assets has increased fairly steadily over the past nine years, the accrued liabilities have grown non-stop during the same period, leaving the fund at 78% of full coverage. What’s more, CalSTRS operated on an assumed annual return of 8 percent. Last year, the pension board lowered that expectation to 7.75 percent, which means projections for the future will show even more of a gap.

Last year, the CalSTRS CEO warned that returns of 20 percent annually would be needed to fund all pensions. Without further increases in revenue or cuts in benefits, the system could be completely broke in 35 years.

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It won’t be broke. They will siphon off more taxpayer dollars to bail it out.

Californians are cool with their hands on their ankles while Brown and his ilk give it to em’!

Opposite Day on March 30, 2011 at 3:13 PM

The next table states that the average retirement benefit paid out in 2010 was $4,256 per month. That’s $51,072 annually.

I realize the cost of living is higher in California, but that’s insane. How long do they have to work in their districts before becoming eligible for that pension?

Doughboy on March 30, 2011 at 3:30 PM

I realize the cost of living is higher in California

Doughboy on March 30, 2011 at 3:30 PM

Of course, once they’re retired, they can also move to a place with a lower cost of living and no state income tax.

malclave on March 30, 2011 at 3:41 PM

Well, first of all, it’s a lot more expensive to even live here, we earn more so we pay in more (for me it’s about $1k per month pre-tax STRS contribution, don’t know what the district’s contribution is offhand), so that is basic math. I do not pay into social security.

If I retired at my earliest possible date, my monthly retirement would be in the $1200-1300 range. I have always paid into a trust to pay for my retirement health coverage (pre-tax $90 a month, you have to work at least 15 years to be vested, most teachers’ districts don’t offer that). If I retire at 65 it will be around $3k, maybe a bit more (I won’t have 30 years in by then). It will be extremely difficult to live in CA on that pension.

We’ve had pay cuts for the last two years and will suffer them for at least another one, for me that amounts to a bit over $400 a month–not to mention nearly a decade of no COLA, which in turn decreases the amount of my STRS contribution. I realize that the state’s out of moolah and that’s the way it goes, but for people like me who are close to retirement, it is very hard, because Those last years of contributions (presumably your highest paying years) do make a difference in your eventual disbursement. We’re like everyone else who is seeing our retirement look less rosy. Yeah, tax dollars pay my salary, but I work for that salary, so it’s not like it’s just being given to me (can’t speak for other tax-funded employees).

Most importantly, in order to get that huge pension you’d need to work for 30+ years and be at the top of the pay scale, having paid into the system over those years–the more you make, the more your contribution is, the more your retirement is. And it’s not just teachers in those averages, but all credentialed employees–like administrators, who typically get paid much more.

Do I have a problem with grandfathering in higher employee contributions? None at all, nor do I have a problem with raising retirement ages by a few years. I suspect both of those will have to be done, no matter how much the unions whine about it.

I guess I could move to a less expensive state when I retire, but that would also mean leaving behind my whole life and 7 generations of my family who have lived here–possible, but for a firmly-rooted person like me (who also has no assets to finance such a move), it’d be terribly difficult. I could do it if I had to, and I might have to. 🙂

Bob's Kid on March 30, 2011 at 4:06 PM

Yep. Turns out you can’t drive industry out of your state, shut down offshore drilling and agriculture, impose the nation’s highest regulatory burden on businesses and homeowners, and also fund teacher salaries and retirement packages that allow teachers to subsist in the middle class.

Go figure.

J.E. Dyer on March 30, 2011 at 4:35 PM

Bob’s Kid on March 30, 2011 at 4:06 PM

You have to work 30 years?!?? Oh your poor thing. So if you start at 23 after college, you have to work until the ripe old age of 53 before making $50K a year in pension benefits?!?? The horror! The absolute horror of it all.
All that and you don’t have to pay into SS either. And of course you work 9 months a year which means those 30 years are really only 22.5 years.

And people wonder shy California is a 3rd World country these days.

angryed on March 30, 2011 at 6:46 PM

omg the lazy teachers are so overpaid

Dave Rywall on March 30, 2011 at 11:24 PM

omg the lazy teachers are so overpaid

Dave Rywall on March 30, 2011 at 11:24 PM

Speaking as a teacher, let me say this:

Not all teachers are lazy.

Not all teachers are overpaid.

We have a broken system in most states (my home of New York is a perfect example) where the good ones can’t get paid more to recognize their talents and effort and the lazy ones are protected from firing and replacement by young, motivated, and innovative teachers by ridiculous union contracts.

Stop putting up the strawman of all teachers are lazy overpaid slobs and have some intellectual honesty.

Living4Him5534 on March 31, 2011 at 4:46 AM

You have to work 30 years?!?? Oh your poor thing. So if you start at 23 after college, you have to work until the ripe old age of 53 before making $50K a year in pension benefits?!?? The horror! The absolute horror of it all.
All that and you don’t have to pay into SS either. And of course you work 9 months a year which means those 30 years are really only 22.5 years.

And people wonder shy California is a 3rd World country these days.

angryed on March 30, 2011 at 6:46 PM

It helps to understand what you are barking at. Texas teachers and apparently those in California do not pay SS taxes. They still pay about the same into retirement out of each paycheck so they are not getting off scott free from paying for a retirement like everyone else. They still have to pay all other federal taxes, like medicare. They also lose ALL social security benefits and any money they paid or pay in social security if they worked or worked outside of teaching. So rather than a tax, it becomes an unvolunteered contribution.

When the feds set up SS there was an opt out for academia as long as they set up a comparable retirement system. Texas went with a system that was the same as social security, but with a constitutional lock to keep the politicians out of its funds.

The Texas Teacher Retirement system works like an annuity in that the benefit is tied to how much you paid in over the period of time of your contributions. How long before you can retire is based on when you started as laws have changed. Years or increased benefits can be bought since it does function like an annuity, but retirement is still based on a minimum of years. Baby boomers were not a real problem since they paid in like everyone else. Compare that to the SS that the feds have or had today.

Teachers are not nine to five like most clock based workers. They are paid by contract. There is no hourly wage or pay during holidays or summer breaks. The contract salary is usually divided up into twelve payments so there is a paycheck during those times they are not employed. If they use up their alloted sick days, they have to pay the salary of the sub. Teachers can not claim unemployment in the summer. Federal mandates and professional license requirments have pushed the work year from nine months to around ten months decades ago,. However if you add up the time a teacher spends teaching, grading papers and preparing lessons, in nine months they work as many hours as the average nine to five, and then some.

Of course there are those teachers that don’t have the same class burden; PE teachers and inclusion teachers for example, and those for whom teaching is just a job and put no more effort than they have to to get through the year and with union security, get away with it.

FYI, in Texas teachers do not have the right to bargin contracts with a union. The world has not stopped and our kids are not needing to see a shrink to deal with it. We have unions, but they are the type that public employees should have. They provide legistlative representation, group benefits and legal representation when needed as a protection from abusive parents and administrators.

Franklyn on March 31, 2011 at 5:02 AM

The battles being fought with public union workers are going to the same ones when we have to fight to reduce SS and Medicare payments. When people can’t or won’t accept that there isn’t enough money to pay what everyone thinks they have coming, you get a Madison or a Ohio writ large. I’m willing to work longer and get less to insure I get something. If you don’t think we can’t be Greece, you’re wrong. As countries go, there is no too big to fail.

gitarfan on March 31, 2011 at 2:01 PM

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Ed Morrissey on April 1, 2011 at 3:57 PM


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