Skip to comments.Union Says Teacher Pensions Forced Retirees to Live 'Barely' Above Poverty Level
Posted on 05/01/2012 9:11:22 AM PDT by MichCapCon
A Michigan fiscal policy expert says that a public school employee and spouse would be barely above the poverty level if they had to live on the school employees annual pension.
Gary Olson, a former Senate Fiscal Agency Director and a senior policy fellow at Public Sector Consultants, was quoted as saying that in a Michigan Education Association article about Senate Bill 1040, which would require public school employees to contribute at least 5 percent of their compensation to their retirement plan.
Olsons comments, however, deserve closer scrutiny.
The average pension for a public school employee is $21,000 annually, Olson said. He said he got that figure from the 2011 Michigan Public School Employees Retirement System annual financial report.
That annual MPSERS pension is still higher than the average U.S. government pension, according to a Congressional Research Service 2008 report. That study found people with government pensions had a median pension of $18,000 a year while private-sector median pensions were $7,584 a year. An $18,000 annual pension in 2008 would be $19,178 after it was adjusted for inflation in 2012.
The U.S. Department of Health and Human Services states that the poverty level for a household of two in 2012 is $15,130 in 2012.
A household of three would have a poverty level of $19,090, which would meet Olsons standard of barely above poverty.
But that would mean that the household of three is only living off that single public school employees pension.
Olsons quote also doesnt factor in Social Security. If the public school employee and spouse were eligible for Social Security retirement, they each could make an extra $29,000 a year combined. According to the Social Security Administration, the average annual benefit for a retired worker in the U.S. in 2012 was $14,760.
That would mean that retired public school employee and spouse could have an annual retirement of $50,000-a-year relying just on the single school pension and each persons Social Security pension.
To meet a poverty threshold of $50,770, a household would have to have 11 people.
When contacted by email, Olson said he didnt make his comments about poverty during his testimony before the Senate hearing. When it was pointed out in a later email that the comments were in the MEA article, Olson didnt respond.
Another fiscal policy expert says the MPSERS pensions are fair.
The state offers decent pension benefits to members who have cost taxpayers billions, said James Hohman, a fiscal policy analyst with the Mackinac Center for Public Policy. Policymakers can be confident that the reforms they are considering will continue the states generosity, despite objections from current members.
Math is not a friend of liberals.
And it appears that it is even less a friend of liberal teacher’s union idiots.
Get some of that money back from the teachers union......OK.....well......get it back from the Democrat party, then.
Po sufferin teachers living under the yoke of slavery.
If anyone wants on the Michigan Cap Con ping list, let me know.
Barring a miracle from Soc Security, I'll be financing my own retirement. It's hard for me to be sympathetic.
Do you know what their health care/health insurance benefits are in retirement? I am guessing that, in addition to that “paltry pension”, they are getting free health insurance for life for themselves and spouses, with no or very low deductibles.
Well if there’s a problem then perhaps how and where the pension funds were invested needs to be investigated.
Yeah. I'm 25 and I'm not counting on anything. Here's an American thought... If I don't like how my retirement is going to look, work harder and improve it.
My Mother owns a little house that is paid for, does not take much medicine, and lives on less than $10,000 a year from my Dad’s social security. She actually saves money every year. Because of her savings, she got means tested out of some small VA benefits.
If you prepare and get your home paid for, in a lot of non-urban settings, you can live modestly pretty easily on $21K per year. Modest home. Manages her expenses. Has an older car that she rarely uses. She just lives a simple, frugal lifestyle. Most of the time, it is not about how much you make, it is about how much you spend.
No pension at all here. Also zero sympathy for these people. I will be shocked if I get even a nickel out of social security, so I expect to work and support myself till I drop. Zero sympathy.
“No pension at all here. Also zero sympathy for these people. I will be shocked if I get even a nickel out of social security, so I expect to work and support myself till I drop. Zero sympathy.”
Sucks to be you.
Most teachers are in defined benefit plans that provide a check a month for life after they retire. Typically a teacher with 25-30 years of service will retire with anywhere from 50% to 70% of their final pay.In addition, they will also be eligible for social security that will supplement their public teacher pension. Outside of public sector plans there are few private sector employers that offer defined benefit plans with a guaranteed annuity monthly check for life. Most private sector employees would gladly trade in their defined contribution plan that does not provide a lifetime check for the defined benefit plan that this union guy is whining about.
I certainly could use the 12-odd percent that my employer and I are forced to kick in for something I doubt will exist anymore in 20 or 30 years.
And all of the 401K contributions, from both myself and my employer.
And all of the other, personal contributions that I make to my IRA's.
If I had all that cash, I'd not be as concerned about self-entitled louts, who are whining that they're not getting their share of slop from the hog trough. I guess that they should have husbanded their money a little more wisely while they were working.
50-70% of final pay:
I read somewhere awhile back that Michigan teachers are either the 3rd or 4th highest paid in the country. So, that should make for a pretty tidy pension - much better than I am expecting. Unsustainable when Boomers start retiring