Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Our teacher's pension system is 40% funded whereas the other state employee's plan is only 17% funded. Very powerful lobby. Plus getting paid for not working all summer. So sick of hearing teachers whining! And half aren't even literate...
You're confusing students with teachers. We have staff days, professional development says and so on that are still work days even though students have off.
In most school districts teachers are required to give 7-10% of their salary to a pension plan that will die with them. White collar workers have access to 401 k plans with matching contributions, lucrative profit sharing plans, expense accounts, etc. Also a 401k plan is part of an estate and can be passed onto heirs. Not so with a pension. White collar workers have no comprehension of that.
There was a time when 401K match, profit sharing, bonus, stock options were the norm... that ship has long sailed and no longer exists... one by one they disappeared over the last 15 to 20 years in my field.
It is something civil service workers have no comprehension of.
In most school districts teachers are required to give 7-10% of their salary to a pension plan that will die with them. White collar workers have access to 401 k plans with matching contributions, lucrative profit sharing plans, expense accounts, etc. Also a 401k plan is part of an estate and can be passed onto heirs. Not so with a pension. White collar workers have no comprehension of that.
Many of the pension plans that I have reviewed in a number of Midwestern states have some provision for widow/widower benefits. If the retiree selects those provisions, they accept a smaller pension payout but the pension continues until the death of the spouse.
One thing to remember is that the presence of a defined benefit plan (i.e., pension plan) does NOT preclude an individual from funding other retirement vehicles (i.e., 403(b) plan Traditional and Roth IRAs).
Most of the teachers "required" to contribute 7-10% of their income are EXEMPTED from paying the 7.65% employee social security (FICA) that private employees pay.
Many of the pension plans that I have reviewed in a number of Midwestern states have some provision for widow/widower benefits. If the retiree selects those provisions, they accept a smaller pension payout but the pension continues until the death of the spouse.
One thing to remember is that the presence of a defined benefit plan (i.e., pension plan) does NOT preclude an individual from funding other retirement vehicles (i.e., 403(b) plan Traditional and Roth IRAs).
Most of the teachers "required" to contribute 7-10% of their income are EXEMPTED from paying the 7.65% employee social security (FICA) that private employees pay.
about 40 percent of teachers are not covered by Social Security because they teach in jurisdictions that have not elected to participate in Social Security. This means these teachers don’t contribute to the Social Security system (7.65% of their income up to $117,000 this year with a corresponding 7.65% contribution from their school district) but it also means they don’t earn Social Security credit toward their retirement benefit. Some or all teachers in fifteen states—Alaska, California, Colorado, Connecticut, Georgia, Illinois, Kentucky, Louisiana, Maine, Massachusetts, Missouri, Nevada, Ohio, Rhode Island, and Texas—are not enrolled in Social Security.
Most people probably don’t realize not all workers are covered under Social Security. In particular, teachers constitute one of the largest groups of uncovered workers. Nationwide, approximately 1.2 million teachers (about 40 percent of all public K–12 teachers) are not covered under Social Security for their time in the classroom.
Contribution rates for public employees to their pension funds varies. What folks in those states that don't participate in SS often don't consider is that not only are the employees not contributing the government agency isn't either. Doing away with defined benefit pensions wouldn't eliminate employer costs in those states completely as they would then need to contribute 7.65% as you have noted. The savings would be the difference between the current public employer contribution rate and 7.65%. In addition some states with budget issues have elected to not make the supposedly required contribution to their pension funds and their fiscal year contributions in some cases is zero or less than 7.65%. If required to participate in SS states that currently don't wouldn't have that option.
One of the biggest benefits to states and society is that contributions are invested and there are trust funds. Those funds investments are one of the major contributors to capital growth in our country. Pension payouts to employees are deferred contributions invested with ROI. Not invested they may well have been spent in previous years. Cpnsider the impact on the stock market or the current level of markets if pension fund trust funds were not flowing through the markets? Bonds for roads and construction? Government knows this and understands and continues to support the concept of defined benefit pensions with modifications needed to assure sustainability.
I always remember this from the Great Recession and the banking system being on the verge of collapse and needing an infusion of money. Curious who FDIC wanted to turn to:
Last edited by TuborgP; 10-30-2016 at 12:00 PM..
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
