I was just reading a news article in our local paper, and it spurred me on to reacquaint myself with New York State’s new Tier VI in its Teachers’ Retirement System. This is the new tier that raised the age for penalty-free retirement to 63.
This is the same state which, a number of times in the past 20 years (including 2010) instigated retirement incentives to encourage its older employees to get off the payroll. Now it addresses its economic woes with a plan to encourage its older employees to stay in there a little longer. Who does that benefit? The Retirement System!!
The taxpayers will be paying for these teachers for a longer span of time!!! Less time for pension payout!
After all, the NYSTRS, although OK now in its investments, did not fare too well during the downturn of the past 4 years. Even though, employer contribution rates are well below the rates from the 1980s. The rate for 2012-13 will be 11.84% of payroll. The rates in the 1980s averaged well above 20%.
The rates did drop in between, to a low of less tghan 1%, but that savings for the districts was used in many, if not most, cases as fodder for raising teacher’s salaries, which had been in the tank.
The more I look at the numbers over the years, the stronger my feeling is that our education funding system has to change. With the exception of capital funding, the system is basically pay-as-you-go. No saving for a rainy day, no real long term planning.
Maybe, in the end, we get what we deserve?