"A new ballot initiative has been certified by the state in order to gather signatures to place it on the June or November 2010 ballot. This initiative, sponsored by the California Foundation for Fiscal Responsibility, will ask voters to approve severely reducing pensions for all retired public workers, including police, firefighters and teachers."
Teachers and administrators receive their pensions from the California State Teachers Retirement System or CalSTRS. This proposed ballot measure must first gather approximately 670,000 signatures to qualify for placement on the ballot. President Marcia Fritz of the foundation has titled this initiative, the New Public Employee Benefit Reform Act.
Nice and catchy, isn't it? Don't be misled.
Initiative would slash new retiree benefits
If passed, pension benefits of new public employee retirees will be significantly reduced.
The pension reductions for firefighters, police and other public workers would be different under the act, but all these reductions in my opinion would discourage individuals from seeking a career in these fields. For educators — teachers, counselors, nurses, librarians and administrators — the maximum benefit paid under CalSTRS would be 1.65 percent per year of employment of the average of the highest five consecutive years of base wages if they retire at age 67, a significant reduction.
Now it ranges from 2.4 percent at 65 and 2.0 percent at 60 for the average of the highest three years of employment.
This initiative undoubtedly will appeal to many who have seen recent media reports of public school retirees receiving more than $100,000 a year. Yes, there are a few who do receive this amount and probably most earned these high retirement benefits. These individual are mostly the higher paid superintendents, but compare them to private industry-wide chief executives and their salaries are not that high. But the facts are that only 1.6 percent of public school retirees receive pensions of more than $100,000. The average retired educator who paid into CalSTRS at 8 percent of the retiree's salary for more than 26 years receives $2,700 per month.
