By Bill Zettler
The Social Security Administration recently announced the average Social Security benefit for 2008: $13,500/yr. More recently I received via a Freedom of Information Act the names of all the retirees from Consolidated school District 211 in Palatine, Illinois. The average for those 13 retirees was $96,000/yr at an average age of 58 versus Social Security’s age 63.
Using the Champion News Teacher Salary Database I determined that none of the 13 had had a salary less than $103,500 over the period July 1, 2004 thru June 30, 2008. Using those 4 years to determine the estimated beginning pensions gave starting pensions from $89,000 to $119,000 per year. The formula for the beginning pension is as follows: Take the average of the four highest salaries and multiply by 75% to determine beginning pension.
To determine the ending pension compound the beginning pension by the annual 3% COLA for 27 years which is the life expectancy at age 58. We use age 58 because that is the average age of retirement for members of the teachers Retirement System (TRS). The same calculation for each year determines the total pension payout ($50,563,534) assuming a normal life expectancy. The total pension payout by individual ranges from $3.5 million to $4.8 million.
Finally we determine what I call the “Cash Annuity Value” of the pensions. This is the amount of cash a person in the private sector would have to give to an insurance company or mutual fund (in this case Vanguard Mutual Fund) to obtain the pension payout guaranteed by TRS. As you can see the cash value of these pensions is in the millions of dollars.
This exercise once again highlights the excessive total compensation being paid to many public workers especially teachers. When we add in the shorter work year, value of tenure, gold-plated fringe benefits on top of lavish early pension benefits we end up with a very privileged, very expensive class of workers.
Keep in mind these 13 millionaires are not outliers but are indeed the vanguard for 900 more certified District 211 employees who will follow them to multi-millionaire status year after tenured year.
If the purpose of taxation is to provide for the common good, we may ask what common good is provided by making public employees multi-millionaires in their fifties? None that I can think of.
Illinois Community School District 211 – Retirees 2008
Bill Zettler is the owner of a computer-consulting firm in Illinois and a contributor to ChampionNews.net. Click here to read more by Mr. Zettler.