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What the FACTS Reveal about Teacher Retirement Programs—Part 6 of 6

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When I retired, the school district stopped paying me and saved the tax payers money since most teachers that retire after teaching 30 years or more are replaced by younger teachers that are paid much less.

Keeping older, higher paid teachers working longer will only cost the taxpayer more in the long run since those same teachers that are working longer will end up with a larger monthly pension check since the longer a teacher spends in the classroom, the larger the pension.

I’m impressed when a reporter does their job properly and balances the news instead of feeding the mob that bellies up to the slop-trough of Yellow Journalism, which is based on sensationalism and crude exaggerations.

Don Thompson’s misleading AP piece, Public retirement ages come under greater scrutiny did not impress me.


This is the summary of Retirement Heist: How Companies Plunder and Profit from the Nest Eggs of American Workers by Ellen E. Schultz.

However, Kevin G. Hall did.  Hall writes for the The McClatchy Company, the third-largest newspaper publisher in the United States with 31 daily newspapers in 15 states. Hall provided a more realistic, honest balance of Why employee pensions aren’t bankrupting states.

In his piece, Hall wrote, “From state legislatures to Congress to tea party rallies, a vocal backlash is rising against what are perceived as too-generous retirement benefits for state and local government workers. However, that widespread perception doesn’t match reality.”

According the Hall, “Pension contributions from state and local employers aren’t blowing up budgets.” They amount to just 2.9 – 3.8 percent of state spending, on average.

In addition, Hall says, “Nor are state and local government pension funds broke. They’re underfunded …”

With those facts, we should ask what the real reason is why the far-right hate groups are turning on public-worker sector pension plans.

The answer may be Wall Street, Hedge Funds and US bank private-sector greed, the same risk-taking greed with someone else’s money that caused the 2007-08 global financial crises.

According The Council on State Governments, in 2006 before the crash, the total amount of money held by these federal, state and local public-pension plans was almost $6 trillion dollars, and greed—it seems—has no limits.

If you do not believe me, ask people such as Bernard Madoff [who robbed his victims of $50 billion], Scott Rothstein [$1.2 billion], Tom Peters [$3.7 billion], Allen Stanford [$8 billion], March Dreier [$400 million], Lou Pearlman [$500 million], Michael Kelly [$428 million], the Greater Ministries International Church [$500 million], Scientology minister Reed Slatkin [more than $600 million], and Nicholas Cosmo [$370 million].

Return to Part 5 or start with Part 1

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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).

Crazy is Normal promotional image with blurbs

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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What the FACTS Reveal about Teacher Retirement Programs—Part 4 of 6

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What Thompson also doesn’t mention in his AP piece is that some states managed their pension funds better than others did.

A March 2011 report on the Best and Worst State Funded Pensions by Adam Corey Ross of The Fiscal Times offers a more balanced picture. Ross wrote, “State pension programs across the country have undergone a major transformation, as more and more of them are cutting back the amount of money they set aside for retired workers, gambling that they can meet their obligations through investments instead of savings …”

In fact, Ross lists the best fully-funded state pensions that existed then, which were: New York, Wisconsin, Delaware, North Carolina, Washington, South Dakota, Tennessee, Wyoming, Florida and Georgia. He also lists the worst state pensions where the gamble did not pay off. However, with Governor Scott Walker in Wisconsin and Cuomo of New York, the public pension plans for those two states are probably doomed along with the public unions in those states if the voters don’t get rid of them in the next election.

California fell between the two lists, but thanks to recent legislations plans to fill the funding gap in a more sensible way. In addition, nowhere does Ross or Thompson mention that California has two state pension plans—CalPERS and CalSTRS.


As Public Pensions Shift to Risky Wall Street, Local Politicians Rake in Political Cash

The California State Teachers’ Retirement System [CalSTRS], with a portfolio valued at $189.1 billion as of June 30, 2014, is the largest teacher pension fund and second largest public pension fund in the United States. In addition, CalSTRS makes it clear that “it’s important to understand that the risk of facing depleted assets exists approximately 30 years from now versus actually facing insolvency today.”

Due to losses from investments during the 2008 global financial crises, the CalSTRS retirement “fund took an enormous hit to its stock portfolio when the market plunged during the heart of the recession, losing nearly $43 billion—roughly 25 percent of its value—from June 2008 to June 2009.”

However, in June 2014, California’s Governor Brown signed Assembly Bill 1469 to stabilize CalSTRS funding in an effort to bridge the nearly $74 billion funding gap that would keep the fund solvent beyond 30 years. Teachers’ Retirement Board Chair Harry Keiley said, “Educators in California do not receive Social Security for their CalSTRS-covered employment and the benefit they earn from years in the classroom serves as the cornerstone of their retirement income. Today’s actions further strengthen the Governor and Legislature’s commitment to uphold the state’s promise of a secure retirement to teachers.”

The vote in the State Senate was 37 – 0, and in the Assembly was 76 – 1. – legislature.ca.gov

Continued in Part 5 on June 10, 2015 or return to Part 3

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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).

Crazy is Normal promotional image with blurbs

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).

To follow this Blog via E-mail see upper right-hand column and click on “Sign me up!”

 

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What the FACTS Reveal about Teacher Retirement Programs—Part 3 of 6

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Back to the public sector retirement plans that did not follow the risky 401 (k) path to retirement. The Public Sector stayed with employer-based defined benefit pension plans such as the one I have through CalSTRS.

It helps that the union membership rate for public sector workers is 36.2 percent and that is substantially higher than the rate for private sector workers at 6.9 percent.


Discover how California is fixing its public pensions

To understand the numbers better and why the media focuses its Yellow/Hate Journalism circus act to attract the biggest hating mob, in November 2011, the Bureau of Labor Statistics reported that there were 20.4 million public sector employees [2 million work for the federal government—the rest work for the states or local county or city governments] and about 128 million private sector employees.

Those numbers help explain why the Associated Press ran the misleading Public retirement ages come under greater scrutiny by Don Thompson.

If you published a newspaper, a magazine, ran a TV news network, hosted a conservative talk show, or wrote a popular conservative Blog, which audience would you focus on to boost advertising rates? As I said, it’s all in the numbers

A, 20.4 million
B. 128 million

Another example of how misleading Don Thompson’s AP piece, Public retirement ages come under greater scrutiny, was: “With Americans increasingly likely to live well into their 80s, critics question whether paying lifetime pensions to retirees from age 55 or 60 is financially sustainable. An Associated Press survey earlier this year found the 50 states have a combined $690 billion in unfunded pension liabilities and $418 billion in retiree health care obligations.”

Continued in Part 4 on June 9, 2015 or return to Part 2

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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).

Crazy is Normal promotional image with blurbs

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).

To follow this Blog via E-mail see upper right-hand column and click on “Sign me up!”

 

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