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Critics of public pension plans like CalSTRS will claim that the cost of these plans are bankrupting states, but that is false—in fact it is a damn lie. For instance, the current annual budget of California is about $156 billion. The state’s annual contribution to the CalSTRS pension plan is usually about $1.4 billion or 0.89% of the total state budget. With the 30-year plan from AB 1469 to stabilize the funding gap to uphold the state’s promise of a secure retirement to teachers, the state will be paying $1.9 billion annually to CalSTRS (instead of $1.4 billion) or 1.12% of the total annual state budget of California. – ebudget.ca.gov

It’s a fact that misery loves company and when the accountants, carpenters, clerks, plumbers, reporters, salesmen, and secretaries, and many other professions in the private sector, read the Yellow/Hate Journalism in Don Thompson’s AP piece, Public retirement ages come under greater scrutiny, many of these people in the private sector will say, “It isn’t fair. If we have to work longer and suffer, so do they.” In fact, that is already happening. Due to pressure from the private sector, this has led to: “Earlier in New Jersey, part of a legislative deal struck between Democrats and Republicans raised the normal retirement age from 62 to 65,” Thompson wrote.

Is Your Pension Safe? States Struggle With Pricey Challenges

On the other hand, when given a choice, many private sector employees do not save toward retirement other than Social Security. Many do not put money into 401 (k) plans or pay into tax deductible IRAs.  Many that own homes take out equity loans to finance vacations, purchase new cars, pay off credit card debts, or go on spending sprees.

The result is that the average family in America cannot afford to retire as early as many public employees that paid into employer-based defined benefit pensions.

For example, total U.S. consumer debt was $2.43 trillion as of May 2011. Average credit card debt per household was $15,799. Average total debt in 2009 (including credit cards, mortgage, home equity, student loans and more) of U.S. households was $54,000. Source: Credit Card.com

As for me, instead of paying into Social Security while I taught, I paid 8% of my gross monthly pay for thirty years into CalSTRS, and the school district where I taught contributed a matching amount of about 8%. That means if I get any Social Security from the jobs I had outside of teaching, it isn’t going to be much.

In fact, to force public educators in California to work more years may cost more than it will save.

Continued in Part 6 on June 11, 2015 or return to Part 4

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Lloyd Lofthouse is a former U.S. Marine and Vietnam Veteran,
who taught in the public schools for thirty years (1975 – 2005).

Lofthouse’s first novel was the award winning historical fiction My Splendid Concubine [3rd edition]. His second novel was the award winning thriller Running with the Enemy. His short story A Night at the “Well of Purity” was named a finalist of the 2007 Chicago Literary Awards. His wife is Anchee Min, the international, best-selling, award winning author of Red Azalea, a New York Times Notable Book of the Year (1992).

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