Teacher pensions need a revamp in today’s world

It’s time to remove the teacher pension albatross from around the necks of Michigan school districts.
May 2, 2014

Much-needed classroom dollars are being sucked up by the enormous pension payments that districts have to make each year.

Sad, but true — the day of pensions is quickly coming to an end. Schools and governmental agencies can no longer afford them. And taxpayers who don’t have them are sick and tired of paying for them.

Many years ago, teachers and governmental employees did not make much, but they were given pensions and great fringe benefits to make up the difference. Then they organized as unions and their pay also went up. So, they were getting decent pay plus great pensions and great fringe benefits, such as top-on-the-line health insurance.

This was also true of the auto industry that began crumbling years ago due to extreme pension and health care costs.

Everyone would love a pension, but they just are not sustainable. Many states, cities and school districts face bankruptcy because they can’t afford to fund the pension fund.

We are not saying to take away pensions from teachers. If they signed on with the promise of getting a pension, they should receive it.

But we do agree with Michigan Senate Bill 727 that would give new school employees a 401(k), not pensions. Employees could contribute up to 5 percent of their salary to their account, and the local school district would have to contribute an amount equal to 80 percent of this.

We believe this is more than fair.

Our Views reflects the majority opinion of the members of the Grand Haven Tribune editorial board: Kevin Hook, Cheryl Welch, Matt DeYoung, Alex Doty and Fred VandenBrand. What do you think? E-mail us a letter to the editor to news@grandhaventribune.com or log-in to our website and leave a comment below.

 

Comments

Wolverine49457

Perhaps do like the rest of us, get a modest pension from the Union and add to it, the rest of us add 100% and we are just fine, you will be too.

Highlander

Fact: The pension is a part of a teacher's pay package. Other careers occupied by college degreed employees have benefit packages- sick days, paid vacations, college coursework & work related expenses reimbursed, lunch hours, etc.
Fact: Teacher pensions are not 100% of final salary pensions, like in some areas. Over 30-35 years, a teacher contributes into a pension, which amounts 35-40% of their final salary. So, that 40% (which is funded by teachers), is much less than the public perceives. If the TRIBUNE cared to do any REAL journalism, the writer of the yellow article might have learned that teachers now pay even more into their retirement. Many teachers I know have not had a raise in 4-5 years- and have agreed to cuts in salary and benefits for the good of the district.

Fact: After retiring, a teacher's health care package is a skeleton of its former self, because older people move into Medicare, correct?
Fact: Comparing apples to oranges doesn't lend one to finding much factual truth.

LittleSwed

I think it would be a better idea to remove teachers from salaried employee status and simply pay them for hours worked, i.e. 12 to 14 hours a day, + more overtime for weekends. They could then fund their 401K with those overtime dollars and perhaps receive a more modest public school pension as the Wolverine suggests. This will be even more interesting when the schools expand to a 12 month operation. Please do not forget the additional money promised (but not delivered) for exceptional teachers.
P.S. You may also want to take a closer look at the lucrative pensions provided to management staff and the unbalanced grade level assignments between female and male Principals,i.e. take a look at Spring Lake for example....

nextdoor

If teachers don't like what they have maybe they should get a job in the private sector.

leatherball

Very few are working more than eight hour days. What do we pay them hourly for the four months they are off?

Highlander

You are wrong on both points.
1. By the time teachers leave for home at the end of the day, they've put in 8-9 hours+. Many teachers work through their 20-25 minute lunch "hour" tutoring or grading/preparing. Teachers remain after school after students go home attending meetings, tutoring/mentoring, and other responsibilities. Then comes grading essays and quizzes/tests at home. 1.5-3 hours a night, plus some weekends. Many teachers spend 55-60 hours a week.
2. Teachers are not "off" for "four months". Do your basic math. Local school teachers are back at work before students (Aug. 25ish, or earlier) and continue into the second week of June. Looks more like 2-2.5 months. But you keep believing your fuzzy math and cloudy reality.
3. Teachers are not paid for not working. They are not paid to stay at home in the summer. They are not paid during Christmas break or any other vacation. Teachers are paid according to contract from Sept. to mid June. (180ish days). Check your facts before you show your ignorance.

Tri-cities realist

55-60 hours a week, and working through lunch! Oh the horror. Welcome to the world in which the rest of us live. And of the 4 teachers I personally know well, not one of them ever puts in more than 45 hours a week, but maybe they are just more efficient than the ones you know.

Highlander

"Welcome to the world?" What a comment. That world I've been working for mor than two decades. Do your friends know you're a voyeuer, counting their work hours? You have 4 teacher friends, who represent a valid sample of all teachers? You're basing your assumption on the number four? Brilliant. I know teachers all over the state and country who put in 50-60 hours a week. Conservatively.

Do the math, Einstein. 100 students. 100 essays/quizzes x 5-8 minutes per paper. Lesson plans. Rewriting curriculum. Responding to parent and student e-mails. You're clueless. Your ire is misdirected.

Say no to new taxes

The private sector dumped defined benefit pensions years ago. Put teachers and Administrators (and government workers while your at it) into the Social Security system and let them self-fund a 401k. Time to bring the education system into the "global economy" that everyone else has had to deal with.

LittleSwed

Teachers, administrators and many government workers already pay into the Social Security system. However, few can argue against the fact that teachers work with one of the most important products in our economy (our children). The private sector has paid and continues to pay overtime to most of their widget workers, while teachers are somehow expected to work more and more uncompensated hours to educate our children and to also overcome the social ills caused by poor parenting and our global economy.

newspaperlawyer

Could not agree more. People would be raising hell if they had to pay the tax bill if they paid the government workers what a private sector employee could make. I will agree that corporate greed is also out there and will also agree that lots of employees get several kinds of pay, stock and benefit packages that keep their wages down. Some workers are paid huge daily rates of pay instead of an hourly rate. It all comes down to the administrators who are getting rich off the little guy cause the policy makers did not keep those people in check. How about attacking those that are really getting the huge benefit packages. You can expect the little guy to take it in the shorts if the policy and administrators don't lead by example. Start FOIA requesting some of these public administrators contract agreements. You will see some real issues for the tax payers.

Openminded

What most people do not understand (and either does the GH Tribune) is that pensions for teachers are paid out of their salaries. For example, a teacher receives a salary and six to ten percent of that salary is garnished to pay into the state pension fund and for the individual pension of that teacher. The percentage depends on the year(s) that the teacher started working, which is similar to social security payments. So teachers actually pay for their own pension, much like 401Ks in the private sector. Pensions for teachers are not an addition on top of their individual salaries. So out of a teacher's salary, the teacher pays not only for social security but also for their own individual retirement. If a current teacher with 20-30 years experience had paid 5% of their salary into an IRA or other retirement account, at a modest 3% return, that teacher would receive approximately what he or she would receive for the pension he or she has paid into the state teacher retirement system. These pensions are not lucrative, the teachers pay for them, and they take the burden off the taxpayer by relinquishing part of their salary for the future. As for the claim by the Tribune that teachers receive generous salaries, at this time, like those in the private sector, all teachers take home much less money than they did 5 years ago and pay a generous portion of their salaries into insurance coverage.

Vladtheimp

LOL! If "teachers actually pay for their own pension, much like 401Ks in the private sector" why would they complain about moving to a defined benefit plan, which IS the 401K model? I suggest you take the allegedly garnisheed wages teachers pay and invest them in whatever stock or bond market you choose, and then show how these forced investments equate to the pensions they receive. Really, many of us would like to see that math unless it's Common Core, which is entirely possible.

leatherball

That's hogwash. Teachers pay a small portion of their pensions, but the taxpayers of the school district and the state pay the large portion.

nextdoor

If their pensions are already funded there shouldn't be a problem ? Are they

LittleSwed

No, last time I looked they were about 70% funded.

newspaperlawyer

Your saying that the school districts in Grand Haven and Spring Lake are 70% funded?????

LittleSwed

Yes Newspaper lawyer. A 2012 report by the PEW center indicates the state is facing a serious crisis with funding the various pension plans (including the teacher PSERS plan)!
Other sources indicate Michigan has done some projections and changes in the various pensions plans with a target date for full funding in 2036. There is an estimated 40 billion shortfall currently in place, depending on the source.

Highlander

Engler "borrowed" from the teacher retirement fund in the 90's, and recently, it happened again.
http://www.michigancapitolconfid...

In the private sector, this would send a CEO to jail for theft, mismanagement, fraud, etc. Remember, teachers paid their own money into theses funds.

50% of teachers quit the profession within 5 years, and more quit within 10 years. How will the profession attract the "best and the brightest" when the ability to make a life is even less "attractive". It takes 8-10 years to "grow a good, efficient teacher".

Tri-cities realist

8-10 years? Good grief! Is that just how long it takes to be tenured? If it took me that long to be good and efficient at what I do, the company would have rightly found someone who could do it in a fraction of that time.

Highlander

Check your reading skills. I stated that to takes 8-10 years to "grow" a good teacher. If you ask a doctor/nurse, a scientist, a detective, or any other professional how long to took them to become comfortable and have expertise, I imagine that they'd say something similarly. Who who you what representing your interests? A 3rd year doctor? Or one with 10-20k hours of experience?

Maybe your job is so easy that a caveman could do it. Whatever dood. Great people never stop improving.

http://larrycuban.wordpress.com/...

http://community.sparknotes.com/...

happycamper

I always thought that school and government pensions plans were over rated anyway, now they are going broke, like Detroit,

BTL2A

Shouldn't this apply to all government workers? Not sure why it is only teachers.

Interestedreader

Wonder if all the College students who hope to go into the profession are aware of this issue,plan ahead.

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