The article says that its the last five years of service verses the last three years of service. This is different from the “highest three” which would be the highest salary made for any given three years.
If we are talking about the last three years salaries versus the last five years salaries, I don’t think it makes much of a difference. It is possible someone could experience two promotions within the last five years of service. In this case they could experience a significant lost in their retirement. More likely, within the last five years of retirement, a person MAY have experienced one promotion and that would probably have been early within that five year window. But for the most part, I don’t think there are very many people who are promoted in the last five years EXCEPT corrupt bureaucrats who are friends with other corrupt bureaucrats trying to pad their retirement. (I’ve seen this happened.)
In rereading the article, where the problem seems to be is in giving people free medical who retire August 1st and making those who do not retire pay at least a portion of their costs. What that portion is hasn’t been decided so it’s hard to say how much they would lose.
I think it is wrong for any company or government entity to promise people pensions and benefits only to take those benefits away because the company is having problems. People make lifetime decisions based upon what they are promised in benefit packages. They cannot make wise choices if twenty years later a company says, “Oops, sorry but we don’t have enough money that we promised.” This isn’t like the folks at Enron who could have diversified. It is more like the folks at United Airlines who the Supreme Court gave the go ahead to to rob their pension plan to strave off banruptcy. If the rules change, the people may not have joined United or would have change their saving strategies.
If companies or the government want to reduce benefits it should be on the new workers who can make those choices-not on the people who are two-three years from retirement. It’s like telling someone who is 72 years old they are no longer going to get Social Security or Medicare.
All defined benefit pensions should be outlawed. This type of pension "banks" on the solvency of the entity 20-30 yrs in the future. The only type of pensions that should be allowed are 401K's, or in the case of govt 403B's. In these pensions a % is deducted from earnings and the co. contributes a % as well. The monies are put into an account the co. has no control over and can never touch again.
It is more like the folks at United Airlines who the Supreme Court gave the go ahead to to rob their pension plan to strave off banruptcy.
Ultimately they did declare bankruptcy and afterwards the congress passed a law that all future pensions had to be 401k's in the airline industry. Govt should be under the same system.
The problem is the benefits liabilities in some states is so great that even if all future employees were paying for their insurance and their pensions were 401k's it won't be enough to balance budgets.
My prior post was a bit more preachy than usual.
Also, I agree with everything you posted in 39.
If theoretically, Christie offered 66% more ways for the senior most teachers/admins to boost their salary for the final 5 years of employment while otherwise proposing the same rules, then in this hypothetical the NJEA would have supported the plan.
Those corrupt bureaucrats who help out other corrupt bureaucrats pad the salary during the final three years too often are also the union liaisons for the schools and school districts.