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Can I ask why many people here blame the public sector unions? They have nothing to do with the benefit formula in terms of years of service over a base number. They have noting to due with the contribution formula in terms of what the actuaries calculate what needs to be contributed. The unions negotiate salary. Now if the actuaries do their calculations correctly the compensation should not matter with the pension because it should be funded on a three legged stool of employee, employer contributions plus investment earnings.
The spiking of getting a high salary at the end of a career to inflate pensions is done by non-union not union employees
Please note I am not in a public sector union.
Hmmmmm, Hmmmmmm, how to begin? Let me try this way. Right to work, Southern, non union, Republican states have pensions and the same issues. Perhaps thinking hats got left on the floor in the back of the car. Even in non union North Carolina unions which we don't have get blamed. Even a member of the state legislature publicly said he was sick of the teachers union only to be reminded there isn't one. Not sure his constituents heard the rebuttal.
School administrators & teachers have sick day cash outs capped at $15k. It is in law. Police, etc. do not. THOSE are the big cash outs you read about. Any from school admin are dinosaur contracts as reforms hit new contracts in 2009. Also note, sick day cash outs are at the pay rate at retirement. Given how high some of those police salaries can get, you can figure out how those pay outs get so large!
I guess my point was why do Govt workers get to cash out these days in the first place?? Its meant for when you were working and if you were sick.... not as a add on Retirement bonus. Don't have figures to back this up but I bet most teachers or govt workers who work a 25 year career I bet their sick pay "Bonus" is somewhere in the $30k and above neighborhood. Mulitoply that by the number of Educators, police, all govt workers in every little city, town, hamlet in NJ and no wonder the state has issues. Its probably the same in other states as well. Doesn't mean its smart or right!!
No State workers are capped at $15k and teachers from zero to $15k. So no they do not average $30k. Many get zero because they have used their sick time- that is a bigger problem and more costly then those who get the $15k.
At least here the cash out option is there to discourage taking those days unnecessarily. It cost more to hire overtime than to pay them later. Now days ;at least; a state licensed police officer with three years experience is highly sought and cost savings in the end. At ten years with masters license they are highly sought and hard to find with turnover ratio.
No State workers are capped at $15k and teachers from zero to $15k. So no they do not average $30k. Many get zero because they have used their sick time- that is a bigger problem and more costly then those who get the $15k.
Tommy,
wish you were right but I have a lot of friends who became jersey city cops, firemen, and their wives are teachers and based on our beach conversations they all laugh as they know they are in fat city and expect nice or already received nice "Bonus" checks
Actually most of the cops and firemen got out when they were 48 years old, collect a nice 60-70k pension and now take summers off playing golf going to beach and drinking beer. They pick up some contract work during the fall and winter and once May comes back to the golf course. We kid all the time that my taxes are paying for their lifestyles and guess what? They open up another beer and they say, Thank you Jesus.... I don't begrudge them as they put their life on the line for us every day they went to work but you have to be honest, its a pretty good deal at tax payers expense.
I have some other friends who when they retired from police force they became double dippers and now work for the prosecutors office while collecting full pension. not to mention all health, dental, life benefits as well.
Lets not kid ourselves, NJ as well as most states cannot afford this. I don't have the answer but I also don't have my head in the sand. Neither do they when they call me at work every Tuesday, Thursday and Friday from the golf course telling me how beautiful it is out....
Cheers....
PS. forgot to mention, my father was a detective in jersey city and he took advantage of the "System"as well. The question is why didn't I follow in his steps so I could retire at 48 rather than working till 62....
No State workers are capped at $15k and teachers from zero to $15k. So no they do not average $30k. Many get zero because they have used their sick time- that is a bigger problem and more costly then those who get the $15k.
Yup, trying to convince folks to save days can be a challenge. Also when teachers use a sick day they get paid as does the sub who replaces them. The other side is that you are paying teachers upon retirement a current wage and not what the sick day was originally valued at when first accrued.
Retirement planning with pensions and benefits is another skill set that many miss. Example assuming that in addition to your pension you have a 403B/401k plan and you should. If you are maxed out wait until the end of the calendar to retire and pump it all in tax free for the upcoming year. It is the year you get paid not earned that counts. If retiring during the year and have cap room you can still put it all in etc etc.
How Calif. used to handle teachers' accrued sick leave
When I retired eight and a half years ago, teachers' sick leave days (10 per school year) were indefinitely cumulative. Upon retirement, the number of unused days was divided by the number of work days in a school year (typically about 185 or 186) and that percentage of a year was added to the number of years worked in the formula. Note the possibility of having more than a year's worth of sick days accumulated after a long career. There was no check issued upon retirement for the unused sick days.
Let us assume a retiring teacher had fairly decent health and did not use the sick days willy-nilly. Let us further assume, for simplicity, exactly one year's worth. Also, we assume the maximum multiplier (2.4 percent which is achieved at age 63 or at age 61.5 with thirty or more years of service). Further, we assume a final salary of $60,000 which is fairly close to reality in the poorer paying districts here.
So: $60,000 times one (year) times .024 equals $1440, the amount of pension benefit added and which will be received by our hypothetical teacher every single year until death. Further, $1440 times 20 years equals $28,800. So if that teacher collects the pension for 20 years, he or she pockets $28,800 for the sick days. If he or she dies one year after retirement, the amount is $1440. So it's a roll of the dice for both the teachers and for the system.
I understand that sick leave is no longer indefinitely cumulative - I'll have to check on that and get back here.
I was in pretty good health during my 34-year career and was also conscientious; I took very few sick days and had well over one year's worth upon retirement. Based on conversations with colleagues, I am a very unusual case.
When I retired eight and a half years ago, teachers' sick leave days (10 per school year) were indefinitely cumulative. Upon retirement, the number of unused days was divided by the number of work days in a school year (typically about 185 or 186) and that percentage of a year was added to the number of years worked in the formula. Note the possibility of having more than a year's worth of sick days accumulated after a long career. There was no check issued upon retirement for the unused sick days.
Let us assume a retiring teacher had fairly decent health and did not use the sick days willy-nilly. Let us further assume, for simplicity, exactly one year's worth. Also, we assume the maximum multiplier (2.4 percent which is achieved at age 63 or at age 61.5 with thirty or more years of service). Further, we assume a final salary of $60,000 which is fairly close to reality in the poorer paying districts here.
So: $60,000 times one (year) times .024 equals $1440, the amount of pension benefit added and which will be received by our hypothetical teacher every single year until death. Further, $1440 times 20 years equals $28,800. So if that teacher collects the pension for 20 years, he or she pockets $28,800 for the sick days. If he or she dies one year after retirement, the amount is $1440. So it's a roll of the dice for both the teachers and for the system.
I understand that sick leave is no longer indefinitely cumulative - I'll have to check on that and get back here.
I was in pretty good health during my 34-year career and was also conscientious; I took very few sick days and had well over one year's worth upon retirement. Based on conversations with colleagues, I am a very unusual case.
Great detailed post and congrats on saving your days and not overdoing the mental health day thing. What you shared is part of the retirement planning that many miss. It is the gift that keeps on giving and for us each with pensions and spousal benefits it continues in death for the other one. Also it is only $1440 the first year as each subsequent year there is COLA it is enhanced and compounded over time. Correct?
Those growing pains include needing teachers, safety officers and getting them may well mean increased salaries and benefits. However if Jacksonville defaults don't believe that folks will be flocking to the area for jobs trusting government promises.
We're the #1 rated school district in Florida. We don't have any problems attracting new teachers at current salaries (they're waiting on line to work here). It's more the taxpayers I was thinking of. We don't want to pay a ton for new schools and new teachers. Sheriff's office people - I don't know. We don't have a lot of crime - and we still have volunteers who do non-dangerous stuff (although they drive around in county cars). Our "professional" fire department is pretty new (it was a volunteer fire department up until about 10 years ago). So it's still very much a "work in progress".
FWIW - if you ever read the JAX forum - you'll see that people who wouldn't move to JAX in a million years want to move here (I wish they'd move to JAX!). Robyn
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How Calif. used to handle teachers' accrued sick leave
