Two initiatives that would undermine the secure retirement of educators and other public employees have been filed with the Attorney General’s Office. Intended for the November 2010 ballot, the initiatives, sponsored by the California Foundation for Fiscal Responsibility and former state Asssemblyman Keith Richman, are similar to the ones he filed in 2005. Like those in 2005, these initiatives attack the retirement benefits of teachers, police, nurses, firefighters and other public employees and do nothing to solve the current economic crisis. They are flawed, unnecessary and will make it harder to attract and retain quality teachers in our schools. They also completely overlook the fact that Wall Street excesses and corporate abuses are the real threat to retirement security for all Californians.
The average public employee retirement benefit is approximately $4,300 per month after 29 years of service – and seven out of ten public employees receive retirement income of less than $30,000 a year.
The initiatives are complicated and contain several different provisions. Most notably, they would reduce a teacher’s retirement by about 30 percent and create a two-tier retirement system.
The initiatives would significantly hinder the ability of public employees – particularly teachers and those in the educational system – to retire at a reasonable age with an adequate retirement. Educators could not retire before age 62, with that number increasing for newer employees as the federal government increases Social Security age.
In order to achieve the same standard of living in retirement, a teacher must receive approximately 90 percent of what their final compensation was. The average replacement ratio for a teacher retiring now in the CalSTRS system is 62 percent, which means members will have to have enough in savings – and would need to be lucky enough to have enough Social Security earnings (made extremely difficult due to the federal offsets) – to make up the additional 20 percent needed to bring a member up to 80 percent. To make matters worse, an employee’s retirement salary will be limited to 75 percent of their final compensation.
In addition to cutting teachers benefits significantly, the initiatives would prevent non-full time teachers from receiving any retirement or retiree health benefits. This would have a significant impact on community colleges and part-time faculty.
Finally, the plans create a two-tier system that would grandfather current employee’s vested retirement and retiree health care into the existing system, but would make new employees ineligible for retirement benefits until reaching five consecutive years as a full-time employee.
These initiatives – both titled “New Public Employees Benefits Reform Act” – will soon be qualified for signature gathering. CTA encourages you not to sign these petitions.
CTA is part of a broad coalition of labor organizations that includes, teachers, nurses, firefighters, police, correctional officers and state workers, that is working together to protect the secure and fair retirement of public employees.
The Educator will continue to keep you updated with the public retirement benefits situation as it unfolds.