Fiscal irresponsibility of the day: RETIRED CALIFORNIA TEACHERS MAKE MORE THAN WORKING TEACHERS OF MOST STATES
I came across the most recent summary report for the California State Teachers’ Retirement System (CalSTRS) and I thought its pared-down tables and graphs nicely encapsulated the pension situation in the state.
First note that the average annual salary in 2010 for active working educators enrolled in the system was $64,156. The next table states that the average retirement benefit paid out in 2010 was $4,256 per month. That’s $51,072 annually. In other words, the average retired teacher in California made more than the average working teacher in 28 states, according to the salary rankings published by NEA.
The final graph in the report provides the big picture. While the value of the pension system’s assets has increased fairly steadily over the past nine years, the accrued liabilities have grown non-stop during the same period, leaving the fund at 78% of full coverage. What’s more, CalSTRS operated on an assumed annual return of 8 percent. Last year, the pension board lowered that expectation to 7.75 percent, which means projections for the future will show even more of a gap.
Last year, the CalSTRS CEO warned that returns of 20 percent annually would be needed to fund all pensions. Without further increases in revenue or cuts in benefits, the system could be completely broke in 35 years.
The NEA figures can be found here on page 19.