A Lesson in Misleading an Ignorant Public

30 Mar

Dr. Mark J. Perry writes a Blog called Carpe Diem at He bills himself as an expert in economics and finances.

Due to his Blog’s search engine rank, he probably has a wide following so he is misleading many people when he says, “Teachers in CA Receive More in Retirement than Active Teachers in More than Half of the U.S. States.”

While his statement and the chart he included with his post may be true, it doesn’t report all the facts and may mislead many who will then blame California’s retired teachers for part of the financial problems in the US.

However, I’m one of those teachers that retired after working thirty years in California’s public schools often spending 60 to 100 hours a week ten months each year teaching, planning and correcting student work at school and at home all hours of the week and weekends with no pay during the summer break.

In addition, the work didn’t stop when the winter or spring break arrived. Most teachers take work home and spend many days of the three weeks of paid vacation time catching up correcting student work and filling in grades in the grade book.

The only time the work stops is during the summer when there was no monthly pay for two full months.

In fact, after teaching thirty or more years, most teachers are at the high end of the pay scale making the average pay appear higher for retired teachers, and the retirement amount is based on the average annual earnings of the last three years of teaching.

When I retired, the calculation was about 1.95% x 30 (years) = 60.45% times the average of my last three years of earnings. That means I retired with a cut in pay equal to almost 40% of what I was earning my last year in the classroom but it was still higher than a teacher starting out was.

That is why when an average is figured for all active teachers, many are at the low end of the pay scale since so many Boomers are retiring and younger Americans are taking their place in the classroom, which lowers the average annual pay for active teachers.

In addition, California has the highest population in the country, which means more teachers boost that average retirement number higher since there are more teachers in the equation.

When I started teaching full time under contract in the 1970s, I earned about $12,000 annually with medical benefits and paid 8% of my pay into the California State Teachers Retirement System (CALstrs) for the next thirty years with California matching my contribution.

Unlike Social Security (SS), which is broke because the federal government spent the SS money workers paid, CALstrs is a retirement fund with more than 130 billion dollars that is invested in the private sector earning a 7% or higher rate of return annually besides the money flowing into the fund from active teachers that are still paying their annual 8% before taxes and the state’s matching funds.

The money that pays teacher retirement in California does not come out of the general fund that taxpayers pay into except for those matching dollars.

CALstrs reported recently that it is fully funded and has enough money to pay full retirement benefits for the next forty years as long as nothing changes.

Unlike Social Security and many other retirement plans across the country, the American taxpayer is not stuck paying for a teacher’s retirement in California.

However, I’m sure there are many politicians drooling over those billions of dollars that fund the CALstrs retirement system. California governors have borrowed from CALstrs before to balance the state budget then refused to pay hundreds of millions of dollars back to keep the CALstrs system funded.

Then the CALstrs board took the governor and the state to court and won each time so that borrowed money was paid back keeping CALstrs solvent.

Although I worked more than ten years (I started working at 15) before I became a teacher in 1975 to 2005, I cannot collect any SS yet I earned it. The federal government calls that double dipping since I collect retirement from CALstrs and California collects Federal dollars to fund parts of its educational system.

I also retired without medical as most teachers do in California. Only one or two school district out of hundreds in California offers a medical plan as part of the retirement. The district I worked for did not offer one except for COBRA, which is expensive for the retired teacher and only lasts until the retired teacher qualifies for Medicare.

The pay a teacher earns while teaching full time is based on the number of years in the classroom and how many degrees/units one has earned from college/universities. Teachers at the high end of the pay scale in California after thirty years may earn about $75,000 annually while a beginning teacher earns about $38,000 starting out (these were the figures I knew of in 2005).

Each school district has its own pay scale negotiated between the local branch of the teachers union and the school board so pay varies between school districts. Rural school districts in California often pay less than urban ones.

I suspect that applies to the nation too.

Where cost of living is higher, the pay would be higher and real estate in urban areas of California are expensive so the cost of living is higher than most of America.

In California, a teacher that retires after 42 years with a Masters Degree will earn 100% of his or her active teaching pay. However, if the teacher retires after 20 years of teaching at age 55, which is the earliest a teacher may collect at a reduced rate, that retirement pay will not even be 40% of the active teacher’s annual earnings.


Lloyd Lofthouse is a former U.S. Marine and disabled Vietnam Veteran, with a BA in journalism and an MFA in writing, who taught in the public schools for thirty years (1975 – 2005).

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5 responses to “A Lesson in Misleading an Ignorant Public

  1. jonolan

    March 30, 2011 at 11:22

    You’re also attempting to mislead people. Between the foolishness that allows CA morally and fiscally bankrupt government to rob that pension, the inherent and worsening vagaries of the market, and the increasing longevity of pensioners it’s almost a foregone conclusion that the fund will tank sometime in the next two decades.

    The exodus of people from CA and the cuts in education will only exacerbate this prediction.

    At that point, due to federal laws, all the American taxpayers will be hit with the bill for keeping these retired teachers fat and happy.

    • Lloyd Lofthouse

      March 30, 2011 at 16:01


      Do you really think we can trust our elected representatives not to renege on past promises?

      If CA manages to raid and empty CALstrs within 10 to 20 years and/or there is another 2008 global financial crises, which is possible since the architects of that 64 Trillion Dollar Global crash are still in the same positions of power (both G. W. Bush and Obama kept them there), then it is conceivable that Congress will pass a law that will void the guarantees on the teacher’s pensions and just let them all become homeless and die.

      As it stands now, CA cannot dip into CALstrs. The Teacher’s Retirement Board board was appointed by the governors of California and that board has to approve another such loan. The CA assembly cannot just take it when they feel like it. Money borrowed from CALstrs by CA is handled as a loan.

      However, in 2008, CALstrs lost about 40 billion mostly investments with Bank of America. The board for CALstrs restructured the investments and the fund is earning money again. The largest segment of the fund is the return on investments and this is what will insure California’s (as you said) “fat and happy” retired teachers to keep being paid.

      Currently CA has 300,223 active teachers still paying into the CALstrs retirement system. There are also more than 6 million students. The average starting salary for new teachers is $35,760 and the overall average is a bit less than $60,000.

      In 2010, those active teachers and the state of California contributed almost 6 billion dollars to the fund while the fund earned more than 15 billion from investment. However, deductions (money paid to retired teachers) only added up to a bit more than 11 billion, which means the CALstrs retirement fund grew by about 9 billion dollars last year.

      Total expenditures for the public education system in California cost 53 1/2 billion in 2010 but only 3 billion of that was CA’s contribution to CALstrs.

      “The teacher retirement system says it is the second largest public pension fund in the nation, behind the California Public Employees Retirement System, and has a portfolio valued at $147.6 billion. It administers retirement, disability and survivor benefits for California’s 852,000 public school educators and their families.” Source: Bloomberg Businessweek – March 10, 2011 by Adam Weintraub

      All CALstrs has to do is keep CA from robbing the bank and make conservative and less risky investments so when the next economic crash arrives, the fund survives and those “fat and happy” retired CA teachers will never be a burden on the nation’s tax payers.

      So, how am I misleading people? CA never robbed the CALstrs pension fund. In the past, CALstrs loaned that money to the state and the governors had to sign for the loans. That is how CALstrs won all the court cases that forced the state to pay CALstrs back.

      As far as I know, CALstrs has no outstanding or pending new loans with CA at this time.

      Also, what exodus from CA?

      California is currently the most populist state with more than 37 million people. According to the census in 1990, the CA population was almost 30 million. In 2009, CA had 36,961,664 people. According to the census, CA is still growing—just not as fast.

  2. Lloyd Lofthouse

    March 31, 2011 at 06:35


    You also mentioned how CA’s government was morally and fiscally bankrupt. True but California is not alone. It has much company.

    I suggest you check out the US Debt Clock for starters.

    There are also State debt clocks on this site starting with Alabama in alphabetical order. Click on the link for each “state debt clock” and discover how morally and fiscally bankrupt most states are.

    Yet, in California CALstrs (the California State Teachers’ Retirement System) is the second largest retirement plan in the US, and it isn’t in debt and has not borrowed any money from anyone.

    In fact, when CA’s morally and fiscally corrupt government (one of many such states in the US) needed money in the past, CALstrs loaned it to them then later went to court to be paid back and won every case with interest.

    CALstrs isn’t bankrupt. It has almost 150 billion dollars with a history of being morally and fiscally sound for almost a century. CALstrs was founded in 1913. Only time will show us if that will change but I’m not going to hold my breath.

    You see, teachers represent the highest educated and largest profession in the US since they are all college educated and for the most part highly literate and I’ve known math teachers and teachers that were once accountants that watch CALstrs closely and monitor all of the reports to make sure they are acting properly.

    There is no blind trust there. One slip and the word will get out.

    If there is a fox or two in the CALstrs hen house, that fox will have to be super stealthy and crafty. CALstrs membership is 852,316 as of 2010. 213,952 are retired. Big numbers representing many watchful eyes.

    If you were to use Google, you would discover that the CALstrs Teachers’ Retirement Board is looking for ways to make sure that CALstrs stays fiscally responsible for decades to insure the plan will stay solvent.

  3. hart

    July 5, 2014 at 05:14

    It’s too easy to fool people and there are too many fools.

    • Lloyd Lofthouse

      July 5, 2014 at 06:19

      “Fool me once, shame on you; fool me twice, shame on me.”

      And some people stay fools repeatedly—and love it.


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