100% of Education's share of tax increase will go to teacher's pensions (Sacramento: attorneys, schools)

[expatCA]

Originally Posted by SportyandMisty

I see your point, but I think going forward we must start to view things usually considered as "givens" or "fixed costs" (pension contributions) instead as variable costs subject to modification.

The original contracts that created the teacher pension "given" should be considered invalid as it was not an arms-length negotiation.

Legally those contracts can only be changed if both parties agree. Now how many retired employees do you think will give up their retirement dollars? All that can be done now is change the pensions for those not yet retired.The debt that exists will have to be paid as the State cannot go into bankruptcy to get them changed.

[.highnlite]

Is anyone able to show that teacher pensions are any greater than what they paid in? I do not think that there are any other monies that go into teacher pensions other than what they pay in.
I may be wrong, show me.

[Ultrarunner]

Originally Posted by expatCA

Legally those contracts can only be changed if both parties agree. Now how many retired employees do you think will give up their retirement dollars? All that can be done now is change the pensions for those not yet retired.The debt that exists will have to be paid as the State cannot go into bankruptcy to get them changed.

I have to wonder if they can't be changed because of the government angle?

In private industry... changes happen all the time.

A very good friend retired after a career as an Airline Pilot for a major airline.

Airline went through bankruptcy and the pension he was promised in writing and counting on was eventually reduced to 50 cents on the dollar by the court.

I know others that had pensions in utility companies that were decimated when Enron took over and later collapsed.

So, I would say regulators through the courts can and do change contracts without any agreement.

Lots of talk right now about CALPERS, San Bernardino... most of the what is being said says we are headed into uncharted territory.

[expatCA]

Originally Posted by Ultrarunner

I have to wonder if they can't be changed because of the government angle?

In private industry... changes happen all the time.

A very good friend retired after a career as an Airline Pilot for a major airline.

Airline went through bankruptcy and the pension he was promised in writing and counting on was eventually reduced to 50 cents on the dollar by the court.

I know others that had pensions in utility companies that were decimated when Enron took over and later collapsed.

So, I would say regulators through the courts can and do change contracts without any agreement.

Lots of talk right now about CALPERS, San Bernardino... most of the what is being said says we are headed into uncharted territory.

Businesses and City's can file for bankruptcy and have contracts changed or even nullified. However no State can file bankruptcy as far as I know. They MUST honor the contracts unless both parties agree to a change.

[expatCA]

Originally Posted by .highnlite

Is anyone able to show that teacher pensions are any greater than what they paid in? I do not think that there are any other monies that go into teacher pensions other than what they pay in.
I may be wrong, show me.

They pay part and the system pays a part. The system is us tax payers and we pay a LARGE part.

[EscapeCalifornia]

Originally Posted by expatCA

They pay part and the system pays a part. The system is us tax payers and we pay a LARGE part.

And they determine the worker's contribution based on unrealistically optimistic investment returns. So the employee pays less than they should and the taxpayer makes up the difference because its a defined benefit plan.

[steelstress]

Originally Posted by EscapeCalifornia

We also need to get rid of the idea that a decrease in the rate of increase is "slashing the budget" in government.

the above is correct. There are no cuts... just a decrease in the increase. It's still an increase.

[Ultrarunner]

Originally Posted by expatCA

Businesses and City's can file for bankruptcy and have contracts changed or even nullified. However no State can file bankruptcy as far as I know. They MUST honor the contracts unless both parties agree to a change.

That's where the rub is... States can't print money so short of selling state lands their is little the State has of value...

The population is free to leave so saying an absolute obligation exists is fine... as long as it is not impossible to perform.

[.highnlite]

Originally Posted by expatCA

They pay part and the system pays a part. The system is us tax payers and we pay a LARGE part.

You did not answer my question. You merely stated information with no facts to back it up. It is my understanding that teacher pensions are fully funded by the teachers with no additional money added, as I said, show me i am wrong. Simply telling me what you think is not showing anyone anything.

[Curmudgeon]

Originally Posted by .highnlite

Is anyone able to show that teacher pensions are any greater than what they paid in? I do not think that there are any other monies that go into teacher pensions other than what they pay in.
I may be wrong, show me.

AHEM! You ain't from Missouri!

CalSTRS sources of funds

Teachers and administrators pay 8% of their annual salary into the CalSTRS system, approximately $2 billion each year. School districts contribute 8.25%, about $2.2 billion. The state of California makes two annual payments of 2.017% and 2.5%, approximately $1.2 billion a year. Total income amounts to about $22 billion.

Read more: California public pensions - Sunshine Review