“We are the $99K”; Art Teacher Equates her $99,000 Pension to Social Security

Shirley Forpe, a retired art teacher from Palatine District 211, wrote a letter to the editor of the Daily Herald defending her and other public employees’ pensions by equating them to Social Security. In fact she wrote the following: “My pension = your Social Security.”

There are so many errors, myths, delusions, misinformation and bad math in her letter it is difficult to know where to start. I guess we should give Ms. Forpe some slack since she was an art teacher not a math teacher. Of course that raises the first question: why does an Art Teacher, who retired at age 57 after working 36 nine-month years, have a pension of $99,000 to begin with?

Since this is a rather lengthy article, and you may be short of time, I will give you the summary results first, comparing the Art teacher with her peer in the private sector making the same salary but paying into Social Security. A more detailed explanation follows the letter that follows the summary.

Art Teacher’s pension compared to peer’s Social Security pension:
1. Teacher paid in $139,000 and receives $99,000 at age 63.
2. Teacher’s peer paid in $135,000 and receives $23,000 at age 63.
3. At age 63 teacher had already received $564,000 in pension payments.
4. At age 63 peer had received zero in Social Security payments.
5. Teacher worked 36, 9-month years and retired at age 57.
6. Peer worked 42, 12-month years and retired at age 63.
7. At age 74 teacher’s annual pension will exceed 100% of teacher’s total contributions.
8. At age 74 peer’s Social Security will be less than 25% of her total contributions.
9. Since 2001 teachers have contributed less than half as much to TRS as taxpayers have.

Art Teacher’s letter to the editor:

If your boss balanced his budget by not paying your Social Security pension benefits, your boss would be fined, shut down or in jail. (1) When the Illinois legislature did not pay my pension benefits they called it a “pension holiday” and got re-elected and praised for balancing the budget.

Illinois teachers do not receive Social Security. They pay into their pension fund instead. Currently, the TRS rate is more than 10 percent. (2) The only reason some teachers earn more in their pensions than Social Security recipients do is because they paid at a higher rate. (3)

If a retired teacher’s spouse should die, the teacher does not even collect his or her late spouse’s Social Security (4). If teachers earn Social Security credits doing other jobs, they are only entitled to about 25 percent of the benefits they earned. (5) It is unbelievable. (6)

The organizations lobbying to convince legislators that public employees don’t deserve their pensions work for Wall Street corporations that have already stolen your private pensions in 401(k) s. (7) They are multimillionaires who claim they Stand For Children when in fact they stand for greed. (8)

Past pension holidays mean that the vast majority of money in the Illinois Teachers Retirement System is money that teachers earned and contributed. (9)

My pension = your Social Security. We must protect them both. (10)

Shirley Forpe
Retired teacher
Palatine

1. If your boss balanced his budget by not paying your Social Security pension benefits, your boss would be fined, shut down or in jail. (1)
First of all it is “pension contributions” not “pension benefits”. Theoretically  “contributions” are made first then later “benefits” are paid. If my employer had to pay 30% of my salary, as taxpayers have to do for teachers, he would be “shut down” for sure because he would be out of business. No business could possibly survive those kinds of retirement benefits. However, since taxpayers are forced to pay taxes, any amount can be exacted from them by the political process for the benefit of only one small group – teachers. On the other hand employer Social Security contributions are 6.2% about one-fifth the taxpayer contribution to TRS.

2. Currently, the TRS rate is more than 10 percent.
No it is not 10% –  the current teacher contribution for beginning pension is 7.5%. Another .5% is for the automatic 3% COLA (Cost-of-living-allowance). When Ms. Forpe started teaching in 1969 her contribution was 5.5% for pension and .5%. for COLA so over her 36 year career she averaged 7.2%. Other moneys contributed by teachers (1.4%) to the TRS have nothing to do with their current pension payment.

3. The only reason some teachers earn more in their pensions than Social Security recipients do is because they paid at a higher rate.
No again. The reason Ms. Forpe receives a $99,000 pension at age 63 instead of the maximum $23,000 at age 63 for Social Security is because the taxpayers of IL guarantee it. Ms. Forpe paid in (contributed) $139,104 to her pension. Someone on Social Security working until age 63, earning the same salary as Ms. Forpe, would have paid in about $135,000. So no Ms. Forpe your massive $99,000 pension vs. your peers Social Security pension of $23,000 has absolutely nothing to do with your greater contributions. It has only to do with legal political corruption.

4. If a retired teacher’s spouse should die, the teacher does not even collect his or her late spouse’s Social Security.
Neither does any other spouse whose pension (Social Security) exceeds their spouse’s which at max. would be about $28,000. So why should a millionaire like Ms. Forpe, getting $99,000/yr get her spouses Social Security too? Ms. Forpe will collect $3.5 million over her expected lifetime – isn’t that more than enough?

5. If teachers earn Social Security credits doing other jobs, they are only entitled to about 25 percent of the benefits they earned.
That’s because Social Security is designed to be “Progressive” in its benefits with wage earners at the low end receiving 90% of their average earnings while those at the top end (like Ms. Thorpe who earned more than $450,000 over her last four years) earn at a rate as low as 15%.

6. It is unbelievable.
You are right Ms. Forpe, it is unbelievable that a public employee with a taxpayer funded pension of $99,000 who retired at age 57 believes she deserves even more from the taxpayer than the $3.5 million she is already scheduled to receive. Unbelievably unbelievable.

7. The organizations lobbying to convince legislators that public employees don’t deserve their pensions work for Wall Street corporations that have already stolen your private pensions in 401(k) s.
Well I for one have never worked for a Wall Street Corp. nor do I know anyone else who has. What we are more concerned about is public sector unions conniving with politicians to steal our children and grandchildren’s money by making multi-millionaires out of public employees who retire when they are 57. I think I speak for most taxpayers when I say no public employee who worked 36 nine-month years deserves a $99,000 pension. Twice Social Security would be generous but more than 4 times Social Security is unacceptable and unsustainable.

8. They are multimillionaires who claim they Stand For Children when in fact they stand for greed.
I would agree with you Ms. Forpe. Paying a 57 year-old Art teacher $3.5 million not to work certainly does nothing for schoolchildren. It’s not really for the kids is it?

9. Past pension holidays mean that the vast majority of money in the Illinois Teachers Retirement System is money that teachers earned and contributed.
As the following chart shows, since 2001 taxpayers have contributed more than twice what teachers have contributed. It seems to me if anyone should be upping their contributions it should be the teachers. Why don’t they match us dollar for dollar? That would seem fair and the $10 billion ($17.8 billion vs. $7.8 billion) the teachers have shorted the system would go a long way towards solving our $46 billion TRS unfunded pension liability. Taxpayers should  start complaining about how little teachers contribute.

Teachers vs. Taxpayers
State Pension Contributions to TRS 2001 – 2010
In millions of dollars

YEAR

Taxpayer Contrib. (Employer)

Teacher Contrib. (Employee)

Taxpayer to Teacher %

2001

               821

               643

128%

2002

               907

                681

133%

2003

            1,021

                732

139%

2004

            5,489

                769

714%

2005

            1,055

                762

138%

2006

               658

                799

82%

2007

               854

                826

103%

2008

            1,172

                865

135%

2009

            1,604

                876

183%

2010

            2,200

                899

245%

TOTAL>>

         15,781

            7,852

201%

Pension Bond Interest

            2,072

0

Total Paid In

         17,853

              7,852

227%

SOURCE: Teachers’ Retirement System of the State of Illinois
June 30, 2010
Actuarial Valuation of Pension Benefits.

 

10. My pension = your Social Security. We must protect them both.
No Ms. Forpe there is no comparison between your $99K pension and your peers $23k on Social Security as per the following:

a. You paid in a total of $139,000 and receive $99,000 at age 63.
b. Your peer paid in a total of $135,000 and receives $23,000 at age 63.
c. At age 63 you had already received $564,000 in pension payments.
d. At age 63 your peer had received zero in Social Security payments.
e. You worked 36 9-month years and retired at age 57.
f. Your peer worked 42 12-month years and retired at age 63.
g. At age 74 your annual pension will exceed 100% of your total contributions.
h. At age 74 your peer’s Social Security will be less than 25% of her total contributions.
i. Since 2001 teachers have contributed less than half as much as taxpayers have.

The IEA’s endless public relations campaign brainwashes everyone.

The Illinois Education Association (IEA) brainwashes not only politicians, the media and the public but also their own members by making them believe they not only deserve their pensions but have also “paid” for them. Nothing could be further from the truth as we have shown here.

Teacher pensions are unearned, un-payable and unsustainable. The sooner everyone realizes this, the sooner a long-term solution will be reached.

Until then pension bankruptcy is only a few bad investment years away. We will show how that might happen in a future article.

Bill Zettler is a free-lance writer and consultant specializing in public sector compensation. He can be contacted at this mail address.

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