Teachers are some of the hardest working people in all of America. They work for the whole community and get paid a decent salary, which is not even close to the money that they make when they retire. In the past, they have not had any kind of worker’s compensation or pension plans set up for them by the state. That is changing, though. The teacher pension fund is being looked into by state officials in many states, including California. If it is eliminated, the state will have to come up with some new funding solution.
Currently, California schools are required by law to provide retirement and health benefits to their teachers. They are also responsible for the payment of Social Security benefits to the retirees. If the fund were to be eliminated, it means that the California teachers would have to pay for their own retirement and medical costs on their own. That is a scary thought, but the problem goes deeper than that. The pension fund is also supposed to support teacher training and continued education.
Teacher Pension Fund
As of now, California schools get about $14 billion a year from the state pension fund. About one-third of that amount goes to the teachers. Now think about all of the other employees. Each of those employees pays into the pension fund, and when that person retires, they are leaving the state, and their contributions go along for the ride. If those contributions were eliminated, then the fund would have to pay for employee benefits for just the people who are left without a job, and there is no way to plan for that.
The other problem with the current California teacher pension fund situation is that it is very difficult to calculate the teacher pension contributions accurately because the formulas that determine those contributions are somewhat complicated. Even those who are highly trained in accounting may not be able to figure out the equations. There is no uniform way of computing the teacher contributions, and that makes the whole thing more difficult to work out.
A Much Ado
One of the problems with the California teacher pension contribution system is that it is based primarily on the total number of hours that a teacher has worked. If a teacher has worked fewer hours than the state average, then the teacher pension contribution will obviously be lower. On the other hand, if the teacher has worked more hours than the state average, then the teacher pension will obviously be higher. It gets complicated. Then we have the cost of living factor. If you live in a high-cost area, your contributions will obviously be higher.
Finally, there is another problem with the pension contributions made by most teachers, and that is that many employees have stopped looking for work in traditional places such as newspapers, hospitals, schools, and government buildings because those employers do not offer any pension plan. That means those employees will not be contributing to the pension funds. That means those employees will not have a safety net of any kind.
This is something that is beyond our control. We cannot control what happens to the economy. We can, however, control what our tax dollar is doing when it goes into any pension fund. That means that if you are a teacher and you want to contribute to your pension fund so that you can get a nice retirement, then you should be thinking about how you can persuade your state to make the appropriate changes so that you can have a nice pension when you retire.
The teacher pension fund is a great fund for teachers to be contributing to. Unfortunately, those who are most concerned about their futures are the people who are least likely to save and contribute to the fund. Those who are concerned about saving for retirement should encourage their state representatives to include pension provisions for teachers in the reform bill.