Skip to Content

First Person

We’ve Earned Secure Pensions

Here’s why


By Dana Dillon

As an intermediate school teacher, I am often gratified by the show of support that parents and others throughout California show for members of my profession. Everyone I talk with says they value education and the need to inspire and engage our youth to lead our nation’s future.

But I’m offended when I hear grumblings over teacher pensions. I’m earning my pension the old-fashioned way, building it up over decades of public service to California students.

News reports of rich public pensions paid to government officials lead many to think educators retire to a life of luxury at taxpayer expense. Not true.

The median pension in California replaces about 60 percent of our working income. And unlike most workers, teachers in California and many other states do not earn any Social Security benefits for their classroom service. So the state pension represents the only source of reliable monthly income a retired educator receives.

Here’s a typical retired educator: She devoted 35 years to teaching the next generation the skills they will need to succeed in our competitive economy. Some of her last students were the grandchildren of her first classes. Now she’s retired, making ends meet on a pension of $21,000 a year. That is the average for the nation. It’s a little higher in high cost-of-living states like California, lower in low-cost states. Nowhere is it a ticket to “easy street.”

And most of that modest pension is not tax money. Most educators contribute to their pension fund part of each and every paycheck. Employers are also supposed to contribute. Across the country, 75 percent of the pension money paid out comes from the contributions of educators plus the fund’s investment earnings.

While educators contribute through good times and bad, many states simply stopped making their payments when the stock market was booming, as if they thought the market would pick up the tab forever. That is the main reason some state pension funds now need catch-up payments. (No state offered to cancel employees’ contributions when the market was going up.)

In the past decade, the financial health of public pension funds, including ours, has been undermined by the dot-com bust and global recession. However, our situation is not as dire as many would have you think.

Photo by NEA/Christian Lopez

Despite the Wall Street-induced market slump, as of June 2009, California teacher retirement benefits were 78 percent funded and the system had sufficient assets and projected contributions to pay benefits until 2044.

Many other state funds are also in reasonable shape.

To avoid problems in the future, local and state governments must make hard decisions to ensure the solvency of their public pension systems. At the California teachers’ pension fund, the trustees are working with everyone affected to address the system’s projected long-term funding shortfall.

We can manage our funding problems without eliminating the defined benefit pensions that public educators have worked for and deserve.

 —Dana Dillon is a trustee and former chair of the California State Teachers’ Retirement system


Published in:

Published In