Budget Update:
CTA is mobilizing its members to help win a battle to preserve more than $500 million owed by the state to the State Teachers' Retirement System (STRS).
Gov. Gray Davis has proposed as part of his budget plan withholding the state's required annual contribution - worth about $500 million - that is used by the retirement system to fund the pension purchasing power guarantee.
That guarantee provides adjustments to retirees' payments ensuring that their pensions will retain at least 80% of their original buying power, despite the ravages of inflation.
CTA analysts point out that the governor's proposal would jeopardize the current 80% purchasing power level and make it unlikely that teachers would be able to win an increase boosting the guarantee above the 80% level in the future.
CTA experts note that the statute is explicit: the state is obligated to make the annual payment to STRS.
Without the fully funded purchasing power guarantee, the dignified retirement of elderly teachers and other certificated personnel who dedicated their careers to helping California's youngsters will be put at risk.
CTA Members:
Call your Assembly Member and State Senator and ask them to oppose the governor's plan. Urge them to protect retired teachers' purchasing power payments by meeting the state's obligation.
Remind them that the governor's proposal is illegal, as well as harmful to retired educators trying to make ends meet with a pension hard-hit by inflation over time.
Pending Legislation Could Encourage Retirements, in Lieu of Layoffs
Two pending CTA-backed measures could help districts save money while averting layoffs of school personnel.
SB 102, the CTA-sponsored measure by Senate President Pro Tem John Burton (D-San Francisco), would allow members of the State Teachers' Retirement System (STRS) to use up to 36 sick days to help them qualify for retirement bonuses that are already in law. These retirement bonuses include a longevity bonus. The extra days that would be applied as service credit needed to earn longevity bonuses and to qualify to have pensions based on a teachers' highest-year of compensation. Teachers without 25 years of seniority have their pensions based on the average of their three highest years' pay.
The second measure, AB 1207, by Assembly Member Ellen Corbett (D-San Leandro), resurrects an early retirement incentive successfully used by districts in the past. The Corbett bill would require districts to pay STRS for the actuarial cost of providing teachers up to two years of additional service credit.
Taken together, the two measures could provide a significant incentive to some senior teachers to retire early, particularly in districts experiencing declining enrollment or other pressures to reduce staff expenditures.