Tag Archives: CALstrs retirement

Dr. Mark J. Perry writes a Blog called Carpe Diem at Blogspot.com. 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.

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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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