Teacher Retiree Class of 2008: One School District, 13 Retirees = $50 Million in Pensions

ChampionNews.net ^ | September 17, 2009 | Bill Zettler

[Vince Ferrer]

The Social Security Administration recently announced the average Social Security benefit for 2008: $13,500/yr. More recently I received via a Freedom of Information Act the names of all the retirees from Consolidated school District 211 in Palatine, Illinois. The average for those 13 retirees was $96,000/yr at an average age of 58 versus Social Security's age 63.   Using the Champion News Teacher Salary Database I determined that none of the 13 had had a salary less than $103,500 over the period July 1, 2004 thru June 30, 2008. Using those 4 years to determine the estimated beginning pensions gave starting pensions from $89,000 to $119,000 per year. The formula for the beginning pension is as follows: Take the average of the four highest salaries and multiply by 75% to determine beginning pension.   To determine the ending pension compound the beginning pension by the annual 3%  COLA for 27 years which is the life expectancy at age 58. We use age 58 because that is the average age of retirement for members of the teachers Retirement System (TRS). The same calculation for each year determines the total pension payout ($50,563,534) assuming a normal life expectancy. The total pension payout by individual ranges from $3.5 million to $4.8 million.   Finally we determine what I call the "Cash Annuity Value" of the pensions. This is the amount of cash a person in the private sector would have to give to an insurance company or mutual fund (in this case Vanguard Mutual Fund) to obtain the pension payout guaranteed by TRS. As you can see the cash value of these pensions is in the millions of dollars.   This exercise once again highlights the excessive total compensation being paid to many public workers especially teachers. When we add in the shorter work year, value of tenure, gold-plated fringe benefits on top of lavish early pension benefits we end up with a very privileged, very expensive class of workers.   Keep in mind these 13 millionaires are not outliers but are indeed the vanguard for 900 more certified District 211 employees who will follow them to multi-millionaire status year after tenured year.   If the purpose of taxation is to provide for the common good, we may ask what common good is provided by making public employees multi-millionaires in their fifties?  None that I can think of.     Illinois Community School District 211 - Retirees 2008        Bill Zettler is the owner of a computer-consulting firm in Illinois and a contributor to ChampionNews.net. Click here to read more by Mr. Zettler.

[Vince Ferrer]

About 15 years ago I remember watching a 60 minutes type show about the unfunded pensions that would eventually explode if no one did anything about it. The city, county and state governments were promising the world in pensions, and never setting aside enough funds to pay for them because, well, that was a long time from now and someone else will be here to take care of it. And as we can expect nothing was done about it, but the Gen X and Y-ers are here now, so they can take care of it.

Don't ever, ever believe this was an accident, that you can't predict how much they would need to pay out in pension money. This bubble, like the others, is deliberate mismanagement.

[Clintonfatigued]

Wow, I had no idea that teaching in government schools could be so lucrative.

[DontTreadOnMe2009]

Amazing

and this is repeated all over the country.

Wonder why we have no money ... could this be the answer?

What absolutely incredible numbers !!!!!!!!

[lonestar]

I saw or read something about all gov’t unfunded pension plans several years ago-—worse than SS. I believe they said in 20 or 30 years CA would have to spend their entire tax revenue to pay the state, county and local gov’t retirees. I think they’re already there.

[kittymyrib]

The skin flint Texas Retirement Fund pays a retiree with 20 years service in the average small rural districts of Texas a princely $1300/mo. That’s $15,600 a year, for those of you in Rio Linda. The Retirement Fund sits on about $85 BILLION in assets, meanwhile. Teachers in other states don’t know how fortunate they are.

[rstark56]

holy sh*T the dam phys ed teacher make more on retirement than I make working a whole year (not 8 months). No wonder we are going broke.

[SC Swamp Fox]

It gets worse. They then move to low-tax, sunny, red states like SC where their retirement is twice the median annual income. Once here they complain and moan about how backwards we are, they vote for Democrats and use their free time and money to influence local politics.

[Balding_Eagle]

Here in CO we had an unexpected ‘surplus’ in the Public Employees Retirement Accounts some ten years ago.

Since we have some of the brightest minds in the country, they came up with a plan to dispose of this unwanted and unneeded money.

Very fortunately for everyone covered under the plan they allowed employees to ‘buy more benfits’ for pennies on the dollar. they could retire earlier, and with bigger benefits than ever before.

Now of course the PERA plan is way underwater.

Fortunately (again) there is an inexhaustable supply of money in this state to replenish to shortage of funds.

See how everyone wins under these plans?

BTW, that chart is powerless without names. Until names are named, nothing will happen.

[Yossarian]

Maybe ObamaCare’s attitudes toward elderly medical treatment will come in mighty handy.... :-/

[oldbill]

There is a civil war coming soon between government employees at all levels and the rest of the citizens.

These government workers are guaranteed fat pensions like these, health care packages a congressman would envy, while the taxpayers who pay them are losing jobs, losing pensions, and losing health care.

It can’t go on. At some point the taxpayers will revolt, and stop this madness and get rid of the politicians who fund these programs to buy government worker union votes.

[Vince Ferrer]

I almost included a death panel joke in my original post. There is urgency in Obama’s health care plans...

[paul51]

but, it’s for the children /s

[dragnet2]

The city, county and state governments were promising the world in pensions, and never setting aside enough funds to pay for them because

They're finding out daily now, that government employees at ALL levels are choking off the tax payers with their lottery style retirement pensions....

I've been telling people for years, this is going to bring this economy and the tax payers to their knees....

I know a person that was married to a government employee, that died in 1971.....And the living spouse is still collecting this government pension...From 1971!!!

LOL!!!!

[Vendome]

I wish more of these were done and by the alphabet channels.

These guys get far more than a private sector employee ever will.

[rstark56]

This is a shame, military retirees don’t even come close to these numbers. Us military members who retired after years taking down Panama, Bosnia, and Iraq and trying to protect the country from threats foreign and domestic. At least we can say we don’t indoctrinate children. Sorry just a rant!

[paul51]

teach for 30 years and retire a millionaire. Incredible. No wonder the schools are broke and never have enough money

[Vendome]

1hen they say “unfunded liabilities” this what thet are discussing.

[dragnet2]

There is a civil war coming soon between government employees at all levels and the rest of the citizens.

You bet there is....Eventually everyone is going to know about these lottery style government retirement pensions..

From retired cops to retired water department workers....It's freaking unreal what many of these people are making when they retire at 50 years old.

[Vince Ferrer]

I wish more of these were done and by the alphabet channels.

Just for you, I'll let you in on where my secret stash is :)

Pension Tsunami

[Palladin]

What an eyeopener!

Talk about a gravy train!

And the more they are compensated, the more illiterate our young people become.

This is disgusting.

[lonestar]

When today's gov't employees retire, they won't be getting what they are contributing to ---$$$ won't be there.

The ones that really bother me are the ones who give it to themselves...the elected officials --from local to congress--who give themselves pay raises and benefits.

[fungoking]

Here in Missouri I'll retire after 30 years at 85% of my best 3 years. We have a great plan, but I pay in 11 1/2 % right off the top and my employer matches part of that. Why our system is so good is that it is PRIVATE. Social Security has tried to get a hold of it for years. I'm in a rural area below the state and national average in pay. I'm not complaining, my plan wasn't to make a lot of money it was to make a difference.

[bannie]

I’m bettin’ that they retired to escape the hell that is now the curriculum.

[Vendome]

your plan is private and I believe your state and certain rural areas made the decision in 1968 to not have the fed involved.

[Rembrandt]

“There is a civil war coming soon between government employees at all levels and the rest of the citizens.”

In the late 1700’s, the French discovered a handy means of dealing with this kind of problem.

[Faith-Hope]

If I remember right Illinois Teachers are Union. You won’t find those high numbers in Texas unless you are looking at the Supt. Principals and Head Coaches.

[Eska]

In Alaska, the teacher retirement plans have been rewritten three times over the last 20 years. Under the original plan, I have a teacher friend who retired after 32 years, (imagine lasting that long); he gets a little over 4 gran a month. My wife is under the second rewrite, after 30 years she will receive a little under 3 gran a month. So you see, the retirements mentioned in this article are not the norm.

Anyway, after Obama has run the dollar into the ground; that 3 gran might be worth around 500 bucks. Only consolation is everybody will be facing the same problem I guess.

[Vince Ferrer]

Education Pensions in Illinois (video)

[Wally_Kalbacken]

His analysis is precise but not accurate.

“Finally we determine what I call the “Cash Annuity Value” of the pensions. This is the amount of cash a person in the private sector would have to give to an insurance company or mutual fund (in this case Vanguard Mutual Fund) to obtain the pension payout guaranteed by TRS. As you can see the cash value of these pensions is in the millions of dollars.”

The pensions are unlikely to have a guaranteed payout for 27 years. It is most likely that they pay out for life of the pensioner, although under some options they may pay for the life of the pensioner or spouse, whichever is the longest (although that will be at a reduced benefit). But to assume that an annuity that is guaranteed for the life expectancy of the annuitant at age 58 is the correct comparison overstates the value of the pension. The pension is not the same thing as a guaranteed annuity for 27 years (which would pay the estate of the annuitant for 17 years if they dies at age 68, for example).

I’m sure the pension is generous, perhaps generous enough to provoke proper controversy. But it’s not as generous as this purported illustration suggests.

[swmobuffalo]

“teach for 30 years and retire a millionaire.”

In Illinois maybe. In other states, not hardly.

[swmobuffalo]

Just to pick about this guy’s statement. Social Security was never intended to be a retirement fund.

[UnwashedPeasant]

We live in an Apartheid system. A government ruling class vs the peasants.

[Intolerant in NJ]

Using the Champion News Teacher Salary Database I determined that none of the 13 had had a salary less than $103,500 over the period...not bad for nine month's work....

[tcrlaf]

“Wow, I had no idea that teaching in government schools could be so lucrative.”

The Union propoganda that teacher’s are “Poorly paid” is a lie, and has been for several decades now....

[WVKayaker]

[tcrlaf]

“I determined that none of the 13 had had a salary less than $103,500 over the period...not bad for nine month’s work....”

The wife was offered a private sector teaching job a couple of years ago. After totaling her salary and benefits based on 185 working days, at 7 hours per day, there was NO WAY a private company could even come close to what she is making...

[Tellurian]

The pension is not the same thing as a guaranteed annuity for 27 years (which would pay the estate of the annuitant for 17 years if they dies at age 68, for example).

... yet, some of the retirees will live 37 years, and still be collecting their pension. The analysis is based on averages, and life expectancy on a group is quite predictable. (Until Obabmacare takes care of the "problem").

[nutmeg]

.

[Anti-Bubba182]

.....AND the schools are crap!

[wintertime]

What steams me is that when they report the average spending per government indoctrinated student, the districts **NEVER** include those pensions! Retired teachers in my state are NOT considered a school expense. They are merely counted as state retirees.

Besides this the government indoctrination centers use many county services that are never entered as school expenses. These are services that private schools must pay for. And...Then there is our new 70 MILLION dollar school that is a bond issue ( and county expense) and the cost is never amortized over the number of students expected to use that building now or in the future.

The accounting practices of our government indoctrination centers would make an Enron accountant blush!

Whatever the state claims it is paying per student double that number. That is more likely the true amount that it costs to educate a child in your state.

[wintertime]

.....AND the schools are crap!
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Yep! And that too!

[Clara Lou]

I teach in Texas. Texas teachers earn about half of what’s in the article.

[mware]

I teach in NJ. This is my 28 year of teaching.I didn't begin teaching until I was 29 years old.

Right now I make 72K a year. I am planning to retire in about 5 years.

To be honest with the economic situation I am very hesitant to retire. As it is I don't trust SS to be there, and pensions are beginning to look dodgy.

Just in case I have been stashing away money in a TSA for 20 years.

[5thGenTexan]

And, teachers are not eligible for Social Security spouse benefits, since they paid into a 'private system'. That means that my wife will recieve no spouse benefits from SS that I paid for, like everyone else simply because she was a teacher.

If she had not worked, she would receive it.

[MSF BU]

Remember that when somebody tells you that they are underpaid.