School District Retirement Question in California

[suziq38]

One of my friend's said that she is getting $12K a month for life when she retires in about 6 years (she is 55). She is in California.
I am happy for her, but WOW! She is an elementary school principal.
I thought that the school districts were struggling.

She also said that once she dies, her retirement will go to her DH and children.
They will get a lesser amount, but they will get the retirement for life.

I had heard of reassigning the retirement to spouses, but to children as well??
quadruple wow, because she has 4 adult children.
She said that the children will get over $1K for their lives. I am not sure what her DH will get should she die. All through our school districts.
I think this is great for her, but now I know why California is in trouble.

And my point is why are teachers complaining so much with this many retirement benefits?

If you are a teacher or work for a school district what do you get for retirement?

[Deleted]

I am ok with her DH getting money if she dies, but adult children also? Sounds fishy!

[reader79]

I think she is confused. I have never heard of a pension being passed on to children. I know that there are ones where you can select to receive a smaller payout in exchange for survivor spousal benefits, but even the most generous plans do not extend this to other family members. Maybe she has some sort of cash credit that is not part of her monthly payout that she can designate to them as beneficiaries?

My mother is an assistant principal in New York. Her story is slightly different as she spent many years as a SAHM, and has only been earning the big bucks for a few years now. She has told me that if she works another four years (to age 63,) she will increase her benefit to ~$2,500/month.

[Deleted]

Is she a principal or superintendent? $144k a year sounds like a lot for a teacher.

My dad taught for about 36 years in Connecticut, a relatively highly paid teaching area, and his pension is $60k per year.

[Deleted]

How much is she making now? How long has she worked for the school district?

You should be able to verify her retirement formula by googling the school district name and "retirement". That information is public but her actual salary and years of employment won't be.

I've only worked for Calpers and they often reciprocate with other local districts. Still I haven't heard of a case where the retiree makes more than their current salary. It's typically a formula based on 2% x last year(s) salary x years of service. So someone making $100k today x 2% x 30 years of service would get $60k/yr. Even with 40 years of service she'd only get $80k/yr. And I'll have to double-check my paperwork to see if anyone could be named as a beneficary and get benefits for life.

[suziq38]

she is an elementary school principal. It sounds fishy to me too.
On the other hand, she had been working for the same school district for over 35 years by the time she retires.
She started out as a teacher.

[Deleted]

Principals make good money..

[suziq38]

That is what I thought.. maybe she was just bragging after a few drinks.
That is why I put this question out.
I knew someone would be able to verify it, LOL.

[suziq38]

Apr 11, 2011 8:51:26 GMT -5 ArchietheDragon said:

Principals make good money..

Very true.
That is why I thought what she said "had legs."

[swamp]

I think your friend is confused.

My dad has a NYS Tier I pension, the most generous type. He makes slightly less than he did while working, my mother will get survivor's benefits, but the gravy train ends when both of them die. I have a hard time believing CA pensions will pay to adult children on the death of both parents.

Maybe she has her Deferred Compensation plan and her pension mixed up?

[swamp]

Good money, but $144k a year?! That's what the superintendents make around here.

[Deleted]

I checked my Calpers documentation. Under their plan children would get the benefit until they are 18 unless they are disabled. If disabled they get the payment until the disability goes away or they get married.

Either this is a very generous program or your friend doesn't understand it.

[swamp]

I'm going with choice B, bonnap, that she doesn't understand it.

Scary that someone like that is in charge of a school...............

[Deleted]

Well there was that situation in Bell, CA where the City Manager had his salary on an Evergreen contract with 12% annual increases...so I never want to say never.

But if the OP wants to PM me I can try to look it up.

Edit: City was Bell, not Bellflower. City Manager was making $800,000 (population was less than 40k!)

[Deleted]

If she's been working for 35 years she might be under some wacky, generous plan. San Francisco used to offer full retirement and health benefits if you worked for 5 years for them.

[Deleted]

Apr 11, 2011 9:05:34 GMT -5 swamp said:

I'm going with choice B, bonnap, that she doesn't understand it.

Scary that someone like that is in charge of a school...............

In her defense, the OP did say she had a few drinks in her

[Deleted]

Anne,

I think you are mistaken about City of SF employees collecting full retirement benefits after 5 years of service. I dug through their website and they VEST after 5 years of service but they still have to follow the formula. CALPERs employees also vest after 5 years of service. But they also were contributing 7% (pre 1976) of their pay (in lieu of paying SS).

The most generous pay packages were to public safety (Fire and police) whose formula could pop up to 3% at age 55. So after 35 years of service a 55 year old $100k employee would be pulling $105k in retirement!

[Wisconsin Beth]

I think they're going after the people from Bell, CA. I know I saw a headline recently (last week sometime?) but didn't get around to reading it.

[Deleted]

bonnap - you are right. It was not full retirement benefits but health benefits. The system was modified in 2008. Date of hire makes such a difference.

THE WAY IT IS NOW: Under the City Charter, City employees, and certain employees of the School District, the Superior Court and the Community College District who retire under the San Francisco Employees Retirement System or the California Public Employees' Retirement System are eligible for employer-funded retiree health care benefits after 5 years of service. They may receive credit toward meeting this 5-year requirement for years worked with other public employers with whom the City has an agreement, such as the State of California. The City and these other public employers contribute a majority of the retiree's health benefits and pay for these benefits as the costs are incurred. The City estimates that it will owe $4 billion over the next 30 years in retiree health care costs. The City and these other public employers have no separate fund to pay for retiree health benefits.

[Deleted]

Anne,

Yeah, a lot of of DB plans did also include health benefits. But by the time I joined CALPERS (1996) it was no longer included. Some of the priciest pension plan promises (such as bumping up public safety pensions from 2.5% to 3%) happened during the dot com area when public agencies were having trouble recruiting employees to pricy areas like the SF Peninsula. To add insult to injury the Agencies weren't contributing anything because of the investment returns so they just kicked the can down the road when it came to funding. What a mess!

And you're right. Offering full health benefits with no plan for funding was irresponsible...

[Deleted]

bonnap - the future costs in SF are eye popping! Here's some depressing things that came out of Joe Nation's look at a report on the topic:

If ever you wanted to drown in dire fiscal assessments, this is your golden opportunity. Here's the kernel of Nation's dour analysis:

* Even if the San Francisco Employee Retirement System earns the healthy 7.75 percent return it bases its actuarial predictions on, it only has a one-in-three chance of meeting its future pension payment obligations;


* In fact, per Nation, SFERS would need to earn 11.5 percent returns for the next 18 years -- just to have a 67 percent chance of meeting those obligations;


* That the city's unfunded healthcare liability is $4.36 billion -- and will swell to an estimated $9.7 billion in 20 years time -- is not news. Nation notes, however, that even the steps the city has taken to prefund new employees' retirement healthcare will be $1 billion short by 2028.


* Contributions to the city's retirement system are currently equivalent to 16 percent of city payroll. "Based on contribution rates by the city's actuary, the combined share will reach 42 percent in 2015 and 45 percent in 2020." Naturally, since city expenditures are finite, this will lead to crippling budget shortages.

[973beachbum]

Apr 11, 2011 9:43:17 GMT -5 @anne81 said:

If she's been working for 35 years she might be under some wacky, generous plan. San Francisco used to offer full retirement and health benefits if you worked for 5 years for them.

Some of the retirement plans from people who started in the 70's are crazy generous by todays standards. I have a friend who started teaching in the 70's. When he started working his contract gave him 100% of his salary after 30 years with free health benefits for life. The reason they did it was to make up for the fact that his pay for the first 10 years was less than the janitor's.

I don't know how to reconcile the really low pay and generous benefits like the pension with the fact that he was making over $100k for his last 5 years. He is a great guy and I really hope he lives for another 30-40 years but how is the state supposed to pay that pension for the next 40 years?

The pension payments made to his pension plan for his entire career are less than he will get in the first 3 years.

[Knee Deep in Water Chloe]

The PERS system where I live for Tier 1 is the average for the last three years of employment.
(I'm Tier 3; it won't be good for me. )
My husband is in his fourth year as a superintendent. His current district has 875 kids. He makes $101, 295 per year plus $67.30 per month for a cell phone stipend. I mention the phone stipend because it is in his paycheck and will contribute to his average. He won't retire for at least another 15 years.

[Mad Dawg Wiccan]

My father is a retired CA public school principal. There is no provision for his passing on his STERS retirement benefits to me. He does have free medical for life, but that was negotiated with the district. My mother, they only paid for five years. This doesn't sound right, I think she's either confused or blowing smoke.

[suziq38]

Apr 13, 2011 17:11:48 GMT -5 Mad Dawg Wiccan said:

My father is a retired CA public school principal. There is no provision for his passing on his STERS retirement benefits to me. He does have free medical for life, but that was negotiated with the district. My mother, they only paid for five years. This doesn't sound right, I think she's either confused or blowing smoke.

Thanks.
This answers my question.
She's probably "blowing smoke."
Could it be a life insurance policy of some sort that the district offers?

[Elizabeth]

Apr 14, 2011 0:50:00 GMT -5 suziq38 said:

Apr 13, 2011 17:11:48 GMT -5 Mad Dawg Wiccan said:

My father is a retired CA public school principal. There is no provision for his passing on his STERS retirement benefits to me. He does have free medical for life, but that was negotiated with the district. My mother, they only paid for five years. This doesn't sound right, I think she's either confused or blowing smoke.

Thanks.
This answers my question.
She's probably "blowing smoke."
Could it be a life insurance policy of some sort that the district offers?

I sure hope she is confused or blowing smoke. I work in equipment finance, and part of my territory San Diego, and all of the State & Local Government entities therein. I can't tell you how many deals my company Risk department will not take because of the CA budget crisis. Takes money out of my pocket, and embarrasses the customer.