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Tag Archives: retired teachers

Not a Burden on the Taxpayer

I taught in the public schools in California from 1975 – 2005 and contributed eight percent of my monthly gross pay into The California State Teachers Retirement System (CalSTRS). In addition, the school district where I taught matched my contributions. I also invested (rolled over) more than $100,000 from an IRA into CalSTRS to increase how much I would earn by about 9% annually.

Although critics of public education and teacher unions claim teacher retirement in California is a burden for taxpayers that is an outright lie.

CalSTRS is funded by the employees (working teachers), the teacher’s employer—school district, community college district, participating charter school or county office of education. The state of California currently contributes 2.541 percent of the annual earnings of all members—this is an insignificant burden on taxpayers.

For example, the budget for the state of California for 2013 was $477.8 Billion. However, total state contributions for the State Teachers Retirement Plan (STRP) increased by $109.2 million or 9.2 percent to $1.3 billion as a result of additional state contributions due to the unfunded obligation—that is 0.272% (about one quarter of one percent) of the total-state budget.

The video looks back at significant points in California history while chronicling the evolution of CalSTRS from its beginnings as the Public School Teachers’ Retirement Salary Fund to its current position as the largest educator-only pension fund in the world. The video was produced internally by members of the CalSTRS Communications staff.

CalSTRS was founded on the principle that hard-earned retirement benefits recognize decades of classroom service—now and for generations to come.

What pensioners get: The median annual benefit for new CalSTRS retirees represents 60 percent of a member’s final compensation earned while still teaching—that means the average teacher takes a 40% cut in pay when he or she retires—as I did.

The average age of retirees is 62. CalSTRS members do not receive Social Security benefits—even if he or she qualifies—as I did, because I worked outside of education for more than a decade—and most retired teachers do not receive health benefits from their employers.

For example, when I retired at age 60 in 2005, I left teaching with no health benefits. If I had not served in the US Marines and fought in Vietnam, I would have had no health benefits from age 60 until I qualified for Medicare.  However, because of my military service, my health care provider became the VA soon after I left teaching. Most teachers are not that fortunate and are not qualified for VA health benefits.

Without question, CalSTRS, like pension funds worldwide, took a hit due to the 2007-08 global recession, but it is not bankrupt, nor will it bankrupt the state. CalSTRS has historically been a sound system, and until the market collapse had consistently met or exceeded its assumed rate of return. Even under current economic conditions, CalSTRS is about 70 percent funded and has sufficient assets and projected contributions to pay benefits until 2044.

CalSTRS ended 2012 with a market value of $150.61 Billion. The average age of members who retired in 2011-12 was 62 years with a median of 24.4 years of service and the average monthly member-only benefit was $3,936.

For example, if I live to see the year 2044, I would be age 98. How many people live that long? So, who is it that hates teachers so much they are willing to lie to mislead the public?

Discover Razor Wire“I was alone in my classroom the afternoon the boy’s father walked in unexpectedly. He cursed at me and accused me of incompetence, but I was the wrong teacher.”

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Lloyd Lofthouse, a former U.S. Marine and Vietnam Veteran, is the award winning author of My Splendid Concubine [3rd edition].

His latest novel is Running with the Enemy. Blamed for a crime he did not commit while serving in Vietnam, his country considers him a traitor. Ethan Card is a loyal U.S. Marine desperate to prove his innocence or he will never go home again.

And the woman he loves and wants to save was trained to hate and kill Americans.

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What the Numbers say about Creating Jobs in America – Part 1/4

Since I’m a member of the California State Teachers’ Retirement System (CalSTRS), I receive the “Retired Educator,” a quarterly newsletter.  The topic of this series of posts was motivated by the 2012 Winter edition.

To earn my monthly CalSTRS check, I first had to work thirty years as a classroom teacher in California’s public schools while 8% of my monthly paychecks went into CalSTRS to help fund that retirement system, which proves that it is not an unearned entitlement as some might want the nation to believe.

In fact, according to the 2011 Summary Report in the newsletter, contributions from members, the State of California and the federal government, which is why we cannot collect Social Security, was almost $6 billion in 2011. About half came from working members.

In addition, I do not earn an annual six-figure income through CalSTRS. In fact, when I left teaching in 2005, I took a 40% pay cut, as most teachers do, and lost my medical plan, because I could not afford the cost of COBRA, which was more than $1,000 a month.  Add another 14 years working outside education, and the total number of years I worked for a pay check was forty-five.

I discovered from that “Retired Educator” newsletter that CalSTRS lost $53.95 billion between 2007 – 2009 while President G. W. Bush still lived in the White House, but earned back $36.92 billion (2009 – 2011) with President Obama.  Note: CalSTRS did not receive bail out money from the federal government. That money mostly went to big private sector banks—not retirement programs such as CalSTRS.  If you want to know where the money went and how much, CNN.com shows you.

I’ve read that total losses globally were in the trillions. One financial Website set the total at more than $60 trillion US dollars. In China, alone, about 20 million people lost manufacturing jobs leading to labor unrest in 2008 and 2009. In the US, that number of job losses was about nine million.

Even though the CalSTRS newsletter didn’t say so, I learned that the wealthy do not create most jobs as Republicans claim—the working class creates most jobs by spending what little they earn, while the wealthy hoard most of their money in safer investments than those needed to create jobs as you shall learn from this series of posts.

However, I have an old friend that keeps telling me we cannot raise taxes on the wealthy one percent and/or the top twenty percent (those earning $55,000 or more annually—6.24% earn more than $100,000), because it will stop job growth.  He also happens to be a neoconservative-libertarian, evangelical Christian.  He despises liberal and progressive politics and policies.  He has said more than once that he believes G. W. Bush may have been America’s greatest president, and if anything bad happens in America, it is the fault of those evil liberal-progressive Democrats.

It doesn’t matter what the facts reveal. Anything that does not match his opinions/beliefs are liberal lies. He also listens faithfully to the conservative  Dennis Prager radio talk show and belongs to and attends Dennis Prager Fan Club meetings.

Conservative talk radio in the United States is a phenomenon that got its start in the 1980s when the Fairness Doctrine was allowed to expire under President Reagan (he vetoed it after both Houses of Congress voted it into law). This veto then allowed broadcasters to present a political opinion or point of view or pundit (mostly lies, exaggerations and misinformation) without being required to allow equal time for alternative views or rebuttals. The ideology that benefited the most from the loss of the Fairness Doctrine was conservative talk radio shows such as Dennis Prager’s.  See Prager’s Parrots to learn more.

My old friend and Prager fan has also said that he wouldn’t mind if Social Security were repealed as long as the government refunded him the money he paid into the system—and this comes from a guy that lost a half million dollars in the stock market after saving that money in tax sheltered retirement accounts. Later, he had to do battle with the IRS for years because they came for their share of that tax-sheltered money that he borrowed from his tax shelter and gambled away.

No matter what this old friend believes and preaches as if it were one of the Gospels, I’ve learned that what put America on the road to ruin causing the 2007-2011 global financial crises has more to do with the Gramm-Leach-Bliley Act repealing the Glass-Steagall Act of 1933 (this was the final nail in the coffin), which deregulated banking, insurance, securities, and the financial services industry, allowing financial institutions to “grow very big”.

The repeal of the Glass–Steagall Act of 1933 effectively removed the separation that previously existed between investment banking, which issued securities, and commercial banks, which made money through deposits.

The deregulation also removed conflict-of-interest rules that had prevented investment bankers from serving as officers of commercial banks.

It was the repeal of these prohibitions that was later claimed by many to have contributed to the 2007 global financial crises by allowing depositors’ money to flow into risky investments, and according to the Huffington Post, in the first 15 months after the start of the 2007 global financial crises, American Retirement Accounts Lost $2 Trillion and the federal government did nothing to slow the tide of those losses as they bailed out banks and the auto industry.  By the middle of 2009, those losses may have climbed as high as $4 trillion, which is much more than the $54 billion CalSTRS lost.

Continued on February 29, 2012 in What the Numbers say about Creating Jobs in America – Part 2

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Lloyd Lofthouse is the award-winning author of The Concubine Saga. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

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