Rahm and the CPS cuts (homes, tax, move)

[Larry Siegel]

Originally Posted by bella84

I do see some factual errors with the article you've posted, one being that the social security contribution rate is higher and another being that teachers only pay 2% into the system. The social security legally-mandated contribution rate is 6.2%. Teachers in the CTPF are legally mandated to contribute 9%, although 7% of that is picked up by CPS as a benefit, according to the current contract (which I explained in my last post). I'm sure the author of the article had good intentions, but it doesn't appear that he fully understood the differences between legal mandates and contract negotiations...

Nor do I, when it comes to the specifics of particular organizations. I do know the basics (well, more than that) of pension economics and actuarial science. But I don't know the laws and regulations under which CPS operates. I stand corrected on those points.

[chicagobear]

Originally Posted by jonnynonos

Hers another discrepancy from the article. The guy in the article said the average payout was $45k a year without explaining further. That was a red flag to me.

If this article is right, he obviously incorporated all of the people who only taught for 10 years etc. or otherwise fudged the numbers. This says the average payout for a CPS teacher who taught for 30 years is actually $77k annually.

Chicago Teachers' Retirement Benefits Are Extravagant

That's a heckuva lot of money. Anyone whose worked in the private sector knows how much you would have to be banking to pull $77k for life starting at age 55 in a 401k -- comparatively, I think the average American 401k is a paltry 70k total.

I am not saying it's right or wrong; I'm saying its an absolute boatload of money. Like, I would imagine, close to doubling your actual salary.

Plus no market risk. All of that money is invested. When the market tanks, as it always does, the money has to come from somewhere else.

Teachers should be very well paid but the bottom line is the total compensation packages are probably well in excess of the qualifications and competitiveness for the job at this point.

Taking your number at face value, $77K x 30 years = $2.3 million. Is that really true? Career teachers are multimillionaires when they retire? Even applying a discount rate, it is still well over a million dollars.

[jonnynonos]

Originally Posted by chicagobear

Taking your number at face value, $77K x 30 years = $2.3 million. Is that really true? Career teachers are multimillionaires when they retire? Even applying a discount rate, it is still well over a million dollars.

I mean they're not my numbers. They're in the article.

I'm not exactly sure what the lump sum would be. It's all invested so if you're getting 6 percent when you start pulling at age 55 the interest could cover a lot of it.

[bella84]

Originally Posted by jonnynonos

I realize the structure is very complicated but at the end of the day Rahm is proposing a property tax to fund it and the pension manager who wrote the article you posted cites a tax increase as the first way to shore up the system.

You are correct. Although I don't know what is going on in Rahm's head, according to this article (CPS set for $200 million in cuts; mayor floats property tax plan - Chicago Tribune), the property tax is his "alternative" plan. His first choice, again according to this article, is to merge the city's teacher pension system with the teacher pension system that applies to every other town in the state. I personally happen to agree with him on this, but I doubt it will ever happen.

[Bellamouse]

Don't forget, they also get their health insurance at a GREATLY reduced premium (compared to the private sector).

And they get to retire early (compared to the private sector), they get TONS of time off during the year (compared to the private sector), and they pretty much can't get fired.

Oh, and they negotiated themselves a 15% increase 3 years ago (when the private sector was laying people off in droves, and my DH took had taken a 10% paycut). Now they want to strike again.

The system is MESSED.UP.

[Bellamouse]

Originally Posted by chicagobear

Taking your number at face value, $77K x 30 years = $2.3 million. Is that really true? Career teachers are multimillionaires when they retire? Even applying a discount rate, it is still well over a million dollars.

Yes, and don't think they get 77K for the 30 years - they start at 77K and get COL increases every year.

[chicagobear]

Originally Posted by Bellamouse

Yes, and don't think they get 77K for the 30 years - they start at 77K and get COL increases every year.

Well, then since the discount rate and the COLA are pretty similar numbers, they really are retiring with a financial asset worth over $2 million. You just have to live long enough to benefit.

[bella84]

Originally Posted by Bellamouse

Don't forget, they also get their health insurance at a GREATLY reduced premium (compared to the private sector).

And they get to retire early (compared to the private sector), they get TONS of time off during the year (compared to the private sector), and they pretty much can't get fired.

Oh, and they negotiated themselves a 15% increase 3 years ago (when the private sector was laying people off in droves, and my DH took had taken a 10% paycut). Now they want to strike again.

The system is MESSED.UP.

I've said it before (in this thread), and I'll say it again. Don't compare the private sector and the public education sector. No good can com from it. None. Just accept that they are two different ballgames and move on. If we really want to get into that conversation, we can, but it's so not even worth it.

[Bellamouse]

Originally Posted by bella84

I've said it before (in this thread), and I'll say it again. Don't compare the private sector and the public education sector. No good can com from it. None. Just accept that they are two different ballgames and move on. If we really want to get into that conversation, we can, but it's so not even worth it.

Not sure who died and left you King that you get to dictate what gets discussed. If the public education sector were not funded by MY hard earned tax dollars, then I would not care. I do not believe in everyone being equal/fair. I have NO problem with people who earn more/have more. But in the private sector, there have to be results/profits or the gravy train ends. In the public sector, they will just keep sucking from the rest of us until there is literally nothing left. Untenable. Unsustainable. Unacceptable. Unreasonable. Unfair. Un American. And a whole bunch of other "uns".

That said, your advice to "move on" has been taken.... we moved (moved on!) out of state two months ago and sold our house and we will no longer be the donor bodies from whom the leeches will suck. So I will drop the subject now. (But this was HUGE factor in our decision to leave... and we got REAL tired of watching our CPS employed neighbors buy new cars, take European vacations, build additions on their homes, enjoy all the fun summers, while we not only slaved, but went backwards in pay, and then we had to watch them strike?? And demand more from us? BEYOND ridiculous. So we said sayonara....)

[JacksonPanther]

Originally Posted by Bellamouse

Untenable. Unsustainable. Unacceptable. Unreasonable. Unfair. Un American. And a whole bunch of other "uns".

That said, your advice to "move on" has been taken.... we moved (moved on!) out of state two months ago and sold our house and we will no longer be the donor bodies from whom the leeches will suck. So I will drop the subject now. (But this was HUGE factor in our decision to leave... and we got REAL tired of watching our CPS employed neighbors buy new cars, take European vacations, build additions on their homes, enjoy all the fun summers, while we not only slaved, but went backwards in pay, and then we had to watch them strike?? And demand more from us? BEYOND ridiculous. So we said sayonara....)

UnAmerican? I think not. I think getting the most you can out of others is as American as baseball.

Jealous much?

If teaching is so lucrative, why not a career change? Maybe because you know sitting with 30 spawns if the devil for 9 months each year is tougher than any private sector job you ever will hold?