As legislators work an a final budget, and BFT members contact members of the house and senate regarding the “Teacher Tax,” it’s important to have some facts ready to accurately discuss this matter, which will have a profound impact on the income of teachers for the remainder of their careers.

First, here is a short but extremely informative article about the teacher pension system here in Connecticut. As the study in that article explains, right now (paying 6%) teachers don’t break even on paying into their pension until they have worked 25 years. If they paid 8%, that break even point would go out to 30 or 35 years! It also points out that many of the practices, if they were in the private sector, would be illegal since they are so unfair to the employee!

Nationwide, the average teacher retirement contribution is 7.2%. Of course, differing economic situations in each state greatly impact the worth of that contribution. Another thing to keep in mind on this is, should we be keeping our rate “average?” That rate is likely to increase. Are you OK with paying 10% or 12% to keep “average?”

Connecticut teachers also contribute 1.25% of their income to retiree health care, so if the rate increases to 8% for teacher pensions, Connecticut teachers will be paying 9.25% of their income to the state. This means, in the end, teachers would be paying 75% of their pension costs.

For many years now, the state has not contributed the promised amount into the fund, making it insolvent. Why should teachers have to make up for the state not keeping up their end of the deal? Why should we trust them now?

Some Connecticut legislators are promising to “look into” what is known as “Windfall Elimination,” the process whereby teachers who work a second job and eventually collect social security as a result, lose a significant portion of that social security payment due to also having a state pension. However, the “Windfall” problem, because it is social security based, can only be solved by the federal government.

 

 

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