In this post, Glen Brown asked me to set up a category called “pension reform,” so that teachers could exchange information about raids on their pensions. I decided to create a category called “pensions,” as what is happening doesn’t look like reform.
Many states think that the way to recover from the economic crisis of 2008 is to reduce teachers’ pension and benefits. As Glen points out, many teachers cannot collect social security, so a raid on their pension is a deadly blow to their retirement security.
Diane Ravitch's blog 
That’s because most politicians don’t even know that in 14 states, at least some if not all public employees do not pay into Social Security. And when they work in jobs that pay into it before going into public employment such as teaching, they get shafted thanks to WEP/GPO.
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susannunes,
What is WEP/GPO?
I am one who is adversely affected by not being able to collect SS if I collect my teachers pension. I didn’t start teaching until I was 38 and had paid into social security all those years. Something is definitely wrong with that picture. Hey at least give me back what I put in-yeah I’m a greedy public school teacher.
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WEP = Windfall elimination provision
GPO=Government pension offset
These affect workers in states where public employees do not pay into Social Security (14 states).
NEA has an explanation here:
WEP: http://www.nea.org/home/17745.htm
GPO: http://www.nea.org/home/17739.htm
There has been talk in Congress about limiting the offsets or doing away with them altogether, but such attempts have never gone anywhere.
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WEP is windfall elimination provision. Your social security will be reduced depending upon your teacher retirement. GPO is government pension offset. It’s the same thing (I think), but has to do with social security spousal benefits. In CT my social security benefit was reduced because of my very meager teacher retirement.
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Thanks Anne!
I think there are around five states where the police, firefighters and teachers cannot collect any SS if they collect their profession’s retirement funds. So no WEP/GPO for us.
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And thanks susannunes. For some reason your post didn’t display the first time and now it is there.
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I believe in NY state 80% of our pension is self funded. There have been districts yhat did not pay the pension fund. Yet our govenor said we had to change our pension system ( no not for him or the other elected officials). Pensions are just a small part of a state like NY’s budget. It’s like cutting home delivery of a newspaper but keeping the Mercedes to make ends meet.
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I’m in Rhode Island. I was told that I get to work until I’m 67. Also- 42% of my retirement is going into the existing state pension fund and 58% is going to TIAA-CREF. YEA! I get to play the Stock Market!
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You are being lied to and scammed. Politicians are playing a divide and conquer game with us. Go to Glen Brown’s blog http://teacherpoetmusicianglenbrown.blogspot.com/ and search through his topics. They will open your eyes and blow your mind. Also, read Pensions Heist, available at local libraries, to get an international picture of the size and scope of this theft. There are no crazy conspiracy theories here. Just cold faccts .
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The immorality of using :my money” and then refusing to repay it is accepted –and it’s breaking a promise made in return for our contribution they were contributing. They had no right to spend that.
It seems to be a normal part of many people’s life perception to envy most those whose circumstances are just slightly better rather than those who are truly rich. Instead of sticking together, we squabble among each other. That’s part of our school culture too–I think.
Solidarity and trust are two fundamentals of democratic life that are in trouble..
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Thank you for creating a pension category. Corporate school reform is all about money. Pension raiding, theft and/or “underfunding” is part of their monetary purpose.
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Thank you for adding teacher pensions as part of the attack on teachers and public education.
Ken -
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THANK YOU for acknowledging this major crisis and attack on educators!
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The raids on pension systems across the land are accompanied by the exact same kind of noise machine that accompanies the movement to privatize our public school system. You will never hear a peep against any of it from the President. I don’t know what these union presidents talk about when they’re on the bus with Arne Duncan, but they certainly haven’t been persuasive in getting him to acknowledge that one of the greatest robberies of all time is taking place in fast motion. Our states have run up a credit card debt with these underfunded pension systems, and now they’re walking away from that debt, and somehow we keep talking on and on and on about teacher evaluation.
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The corporations are doing a grand job of vilifying teachers/education/unions. They continue to promote their agenda spending billions blaming teachers for the failure of some public schools and the the states failure to pay into the teachers pensions.
I await the courts decision about the constitutionality of changes to the Illinois pensions. It’s a disgrace that our legislators waste their time and our money on this. It’s disgusting!
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Thanks so much for posting Glen Brown’s messages. He is an intelligent, honest and tireless advocate for the rights of current and retired teachers.
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NASRA ISSUE BRIEF: State and Local Government Public Employee Retirement Systems = 3% of all Government Spending.
Click to access NASRACostsBrief1202.pdf
90% of funds used to pay NYSTRS benefits come from investment returns and employee contributions.
Click to access NYSTRS-Dollar.pdf
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In Michigan we are being given the choice of either doubling our pension contribution to maintain our retirement benefits (the contribution would be 8 percent of our current salary) or continue paying what we do now (about 4 percent of our current salary) to take reduced benefits. In addition, for the past 2 years the state has been taking an additional 3 percent of our salary to specifically pay for the health benefits of current retirees. The problem with that is that they are not promising that current teachers will receive any health benefit whatsoever in retirement. The 3 percent contribution has been challenged by the MEA and AFT in the courts and was found to be unconstitutional. However, our governor has decided to take it to the state supreme court even though other state employees have already been refunded money related to a similar lawsuit. Last year a right to work bill was introduced that would only apply to teachers! Fortunately, that bill had little support. Teachers are under fire here even though Michigan is generally a pro-union state. Help!!
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Oklahoma passed a law last year that mandates no COLAs unless the pension is funded at 80% or better. Of course the ONLY Govt pension fund that is not even remotely close is the Teacher retirement system. We won’t neglect to mention that while the schools and the educators have ALWAYS paid their share into the system, the State has only fully funded it’s pension obligation to the teachers once in 32 years. At the same time money has been taken from the system by the legislature to fund other retirement systems. The monies wer enot paid back and when the TRS sued they lost. the basis being that at no time did the Legislature say the money was a loan.
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Thank you, Glen, for asking Diane to add pensions to the conversation. And, Diane, thanks for doing so. This is a HUGE issue everywhere. In Illinois there’s a lot of political sobbing over our pensions–“Illinois is broke! It’s because of YOU greedy teachers!”
I’ve also said more than once that, when the Chicago srike was over, the next punishment for CPS teachers would be to go after the Chicago Teachers’ Pension Fund
(CTPF), Guess what? That’s EXACTLY what’s happening. I even attended a Town Hall sponsored by our state rep., & Laurence Msall from the Civic “Illinois is Broke!” Federation inserted the CTPF into his presentation (during which they were basically discussing the rest of the state–NOT Chicago {their pensions are in a separate system than the rest of Illinois}). Just another discouraging word for future teachers, but we all
know that what the 1%ers and their friends want is to turn all schools into charters, whereby all teachers are TFAs, with small salaries and no pensions. GREAT way to save money!!!
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The problem with this is that the State of IL never contributed to the pension funds in fact they used the monies for other projects, so how did they break the state of IL! I would like to believe that most people would see this, however, it does seem that they do not.
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Thank you for posting Mr. Brown’s insights on your site, Ms. Ravitch. The unprecedented attacks on manufacturing unions and collective bargaining in the private sector (American Airlines, Caterpillar, etc.) are more than matched nationally by corporately purchased politicians targeting public sector unions for the same kinds of cuts in promises made to workers. These attempts in Illinois are not unlike many more in other states across the nation and in cities (like Chicago). Facing difficult decisions regarding revenue streams, our politicians in Illinois and nationally have determined wrongly that the middle class worker, his family, and his children must pay the price. We need for this conversation to take place.
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I’ve been following Glen Brown for a little over a year now. He knows the score in Illinois. Maybe we should have a call in day to our state reps and senators and let them know how many teachers will be voting in November. We should demand that they keep their hands off our pensions! The reform plans in Illinois are like asking the victim of a crime to do the prison time while the offender goes on vacation.
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ALEC is union cryptonite. Funny our president didn’t mention that a vote for Mitt was a vote for ALEC. Grading schools sounds suspiciously like ALECs “Education Accountability Bill” designed to expose possible marks for privatization.
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As a retired attorney, I should know the answer to this, but I confess my ignorance:
To the extent that govt employees have already earned a pension entitlement (that is, they have already worked for a few years under an existing defined-benefit pension system), the employees should have a property right to that defined benefit. That is, the defined benefit is deferred compensation for the work that the employees have done. It’s as if each pay period, the employer had divided the employee’s salary into two parts, given the employee a check for one part, and deposited the other part in a bank account in the employee’s name that the employee could not access until the employee reached retirement age. The $ in that hypothetical bank account — the employee’s already-earned pension benefit — is the employee’s property, even if the employee cannot access that money for a few years.
Under the US Constitution, neither the federal govt nor a state govt can take a citizen’s property without just compensation. That’s why, when the govt takes someone’s land to build a highway, the govt must pay the landowner a fair market price for the taken land. Therefore, the state cannot reduce an employee’s already-earned pension benefit without violating the US Constitution.
Of course, to the extent that the state is reducing the pension benefit that accrues as a result of work to be done in the future, there is at most a much weaker argument that the employee’s right to that as-yet unearned pension benefit is a property right — it’s probably merely an expectation that he/she will be able to earn that $. And, in the real world, it’s difficult to divide an employee’s pension benefit between the part that the employee has already earned and the part that the employee will earn by continuing to work from now until his/her retirement. But — pension actuaries should be able to develop a reasonably reliable estimate of what the employee has already earned and the US Constitution should prohibit the state from taking that away from the employee.
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LL,
Well the state is taking away all of my SS if I choose to take my teachers pension. I have no recourse whatsoever.
Duane
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Dear “Labor Lawyer”:
The Legal Basis for Protection of Public Pension Rights under State Laws:
For “Past & Future” Property Rights (Maine and Wyoming); For “Past & Maybe Future” Property Rights (Connecticut, New Mexico, and Ohio); For “Past Only” Property Rights (Wisconsin).
For “Past & Future” State Constitution (Alaska, New York, and Illinois); For “Past & “Maybe Future” State Constitution (Arizona); For “Past Only” State Constitution (Hawaii, Louisiana, Michigan).
All other states, except for Minnesota (Promissory Estoppel) and Indiana and Texas (Gratuity), have a contractual legal basis of either “Past & Future,” “Past & Maybe Future,” or “Past Only.”
Source: Munnell, Alicia H. State and Local Pensions: What Now? Washington D.C. Brookings Institution Press, 2012.
Court rulings were upheld for public employees’ pension benefits in Arizona, New Hampshire, and Florida this year.
In Illinois, policymakers are going to contest the state constitution, despite their oath of office. Their pension “reform” bills will inevitably be challenged in court.
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IL citizens, not just teachers, should be concerned about what the legislature wants to “reform.” The Illinois General Assembly really has no desire to fix the unfunded liability other than solely on the backs of teachers and public employees:
–Is there talk in this “reform” about changing Illinois’ income tax structure from a proportional tax to a progressive tax like most states? No.
–Is there talk in this “reform” about taxing service businesses in a way most states do? No.
–Is there talk in this “reform” about penalizing our General Assembly members for continuing to fail to follow their own laws by not paying their required contribution to the Teacher Retirement System? NO
–Is there talk about reducing teachers’ pension benefits and having them contribute a significant higher amount (which will most likely be the highest teacher contribution of all 50 states)? YES
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I guess I better start being REALLY nice to my children now so that I have somewhere to go when I retire!
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