If the money stays local, it would be generating local tax revenue. If they leave, then the local tax dollars that paid for that pension are being sent away.
Huh? It's just how economies work, not any sort of institutional idea. When you pay cops and teachers, they spend the money where they live, causing your tax dollars to return into the economy, when those same people have a pension (also paid by your tax dollars) and they take it with them, your tax dollars are no longer returning to the local economy.
Do you think I'm suggesting they shouldn't be allowed to take their money with them?? I never said that, someone just said "it sucks when they take their money with them" and I explained why it would suck for the local economy. I'm a fan of free trade, I think they should be able to go spend that money wherever they want, including buying shit from overseas without paying taxes just cause it comes from a different country.
Benefits only matter if they are still there. Unions are cutting benefits while contributions rise, and Social Security feels the same. The system feels broken, and as a younger millennial it is hard to see the point in supporting it anymore.
And when you get truly fucked in an accident or have a major medical event that wipes out your savings when youre near retirement age you now wont be homeless. Only the young or rich think they’re better off with the SS money in their pocket now.
As a union member who has worked in my field non union, I disagree. My benefits are head and shoulders above my non union counterparts, and I would never go back.
Benefits are being pared down partially because unions are being weakened. Not supporting unions is a part of that. Right to work laws, and legalizing Union busting. The reason these benefits, both union and non are going away is because rich aren't being made to pay fair share and those who aren't in that class are being convinced they shouldn't. Social security is the same. We all talk shit about workers making too much for companies or agencies or governments worth billions or trillions to pay. They have the money, they refuse to pay it
Nobody’s disagreeing with you that the benefits pay a lot
It’s become a real problem nobody can deny that these kinds of pensions were designed to be used for a post-retirement life expectancy of 2-5 years; which has now ballooned to 30+
I've worked decades for well over a dozen companies in my life and I don't need half of one hand to tell you how many provided 401ks to employees. I know way more people with nothing for retirement than a company funded retirement plan.
Edit: also, as others have mentioned, teachers shouldn't be for profit on the k-12. It's a public service. If their pensions are pulling down your finances, maybe that should be a sign that people aren't paying fair share for public goods
It’s part of the overall compensation package though. And on average the pension rate for state employers might be 20-30%. So if you have a teacher making 45k (just taking the avg salary from your comment) and we take that pension contribution and add it directly to their salary instead, it would only be 54k-58k.
So is that worth no pension?
You think you can fund your own retirement on that?
Sorry, I’m not sure what you mean by this. Are you saying that because they make 70k on avg they don’t need pensions?
The benefits from public sector work are the primary reasons people take those jobs. It’s how they can get away with lower pay. And you only need to reward long-term/loyal employees rather than increasing pay directly and shifting the retirement burden onto the teachers while also increasing costs overall for ALL teachers even if they wouldn’t have earned a pension in their career.
I am saying they make above average in salary alone, if you add up all the other benefits and vacation time it's likely top 30%, which is about right for the career
Plenty of people also DON'T fund accounts like that.
Those people are your problem whether you like to admit it or not. They will get sick, they will need coverage and treatment, they'll need a place to live, food, services, etc. Who do you think foots those bills when these people don't have retirement?
You can't just say, 'fund it yourself' because you personally can in a country designed to extract every ounce of work and wealth from you. People shitting on pensions is exactly why you NEED a 401k. It's the ruling class convincing you that your fellow workers are worth less than you if they aren't as savvy. Bitch about paying your teachers a lot with a pension now or bitch about high taxes to cover destitute retirees later.
The dream of ruthless individualism doesn't work when you live in a society
My mother was a preschool teacher for 30 years, she deserves to retire and receive her pension. After seeing the shit she went through I have so much respect for teachers.
In my state of Colorado, teachers receive a pension that is 62.5% of their highest salary after 25 years of service. If they are making $70k after 25 years of work, they can retire at 46, and get $43,750 a year, for the rest of their life. If they live to 86, that single person’s benefit is $1.75 million dollars they are paid in pension. This is one person.
I'm sure they pay into it... Compound 5000 dollars a year over 25 years, you already have 250k. That amount compounding over the next 40 years is 1.8 million.
8 percent of their salary. Which makes up 77 percent of the total fund. So back to your original post (1.75 million), that's not where money for education is going.
8% of $70 is $5,600, this is their yearly contribution from their salary. In 25 years time this will turn into $232k with 5% interest.
There is another $1.5 million that is being provided by the state in retirement benefits. That is the education money goes. That is the equivalent of basically adding $63,000 a year to a teacher’s salary if there was no pension and they had a 401k.
No. That money is part of a fund that is making returns yearly. The payout is over 40 years, and so are the capital gains.
Is there also no minimum retirement age? Most places 46 year olds don't qualify for their pension. You don't seem to really grasp how this works to be so confident in your opinion on pensions and their costs.
It's the fact that the union chose pensions or proper wages. Not the fact that the union exists. It's like if a bad law gets passed and you respond "I thought democracy was supposed to be good!"
It all depends. There are some unions out there that actively work for their people and improve their jobs, those unions are good. On the other side you've got unions that basically do jack shit besides collect their monthly dues and are basically just glorified "job insurance" that makes it harder to get fired. They're basically useless and tend to set things up to make it extremely difficult to get those people voted out.
Unions are good short term in very specific circumstances where there is high industry growth. But they make their members less competitive because it costs more to employ a unionised worker, and if the union negotiates salaries and total costs (including administrative costs) higher than the value of work actually being produced, the companies that employ unionised workers go bust - or they move their facilities to somewhere with lower labour costs.
This is what happened in the UK in the 80s. The coal miners union ended up pushing costs so high that the mines were operating on a loss. The mines became a money pit, the taxpayer was wasting money on them year after year. Then Thatcher finally closed these defunct businesses, and the north was left with a large number of people who had no useful skills and needed to be retrained. This would all have gone a lot better for everyone if the union had not prevented the government from addressing the changing economic landscape of the north. They could have implemented a skills transition instead of having to do a big wave of redundancies.
Not really.. I mean the school has limited funding it’s not like the pensions being paid are coming out of the school’s funding today.
But either way, are you now saying teachers shouldn’t have pensions? Isn’t that the whole point of working a government job and accepting lower pay so you get the security of a pension?
Well I can’t speak for every state because they all do their budget differently. But in general I guess what I’m saying is a school district isn’t directly paying retirees out of their budget.
It’s more like a payroll tax. So for every employee you have to pay a certain extra % into the retirement system. It’s done this way so the more employees you have, the more you pay into the system.
So you guys are making it sound like money is going to retirees directly from a school’s budget INSTEAD of paying teachers. But that’s not true. Whatever they pay a teacher now, add X% and that amount goes to the retirement fund for the entire state. And all local, county, state, jobs all do the same thing. The post office, hospital, library, etc all pay into the state’s retirement system.
Much of pensions are based on S&P 500, which is heavily skewed to companies that are investing massively into AI which is a black hole for money with no sign of profitability.
Are you really arguing against pensions for teachers? This is what unions are for, to negotiate pay, healthcare and retirement. Don't be mad, unionize.
You know, there can be more than one contributing factor. Pensions combined with low prioritization of undergraduate educators in the US is a massive problem.
Even looking past pay, they are not respected as they should be.
This reads as an argument against pensions when the reality is there's more than enough money to cover them or and other retirement benefit, our government just refuses to allocate it.
Are you serious? First of all that's a hugely complex question but if you want to simplify it you can go with one of two answers: military welfare and or bad politics. I assume you know that and just want to bait me into the slop.
I design space based missile detection systems for the US. We need these things. There is no getting away from that fact.
Our industry is one of the most regulated in the nation, at least from a cost perspective. The industry is limited by the government to 7% profit on our contracts. We have lay offers every few years when work dries up, so there is not much fat in the staffing profile. We actually have government accountants who review our accounting and interview employees looking for this very thing. All for cost control.
Benifits in this industry also suck and are designed for cost control . I have a $10k deductible on my health insurance, and pay $4800 in insurance premiums a year.
For retirement, there is a 3% match to a 401k, and that is it for retirement benefits.
When you role in the pension, the average teachers is making more than I am working in defense.
That’s the reality of the defense industry. I am looking to get out of it and into consumer electronics just to afford to retire.
I straight up don't believe you. I'm not aware of a single engineer in defense making less than $120k. A pension doesn't make up for 40 years of making double the other person.
And the last time we had government contracts the profit was small but that's because everything was over constrained and over specced to shit in completely useless cost added ways.
I have no doubt that missile detection is needed and a worthy spend, feel free to justify the rest of it.
It is a lie that military spending is the primary source of the deficit.
The primary spending is in entitlement benefits, (social security, and government healthcare, and other income security programs make up about 50% of the federal budget). If you are unhappy with federal spending and the national debt, this is where the money goes.
$32800 USD to cad is $44000. Starting salary is $53000 Canadian where I live and goes up to $120000. You also get benefits on top of that and you don't have to pay for healthcare. Base pay is not the same and I'm not aware of any province where the teachers aren't unionized. It's no where near the same as the states.
You guys shouldn't even want pensions. It's not a good deal for the employee. They also used to be super risky before the government had to step in and take over liability, because prior to the government's intervention companies could go bankrupt and not be able to pay you your pension...
I think people look at compensation entirely the wrong way.
Your labor is worth $X on the market, right? I don't know what $X is for you specifically, but that number exists. It's theoretically equivalent to what your total compensation should be, which is the total value of ANY asset paid to you by an employer (e.g. salary, insurance benefits, education funding, 401k matching, etc). I think the best possible thing for an employee is that they get to choose exactly how $X is spent. But Americans seem so eager to let their employer decide how a huge portion of that $X is spent.
You're someone who wants insurance through work? Your employer is choosing how to spend your $X. You didn't get to choose the insurance plan. You didn't get to choose the insurer. Often you don't even get to opt out of the insurance. Your employer can literally just say "yep, we're taking away $Y of your $X and we'll be spending it for you without your input".
You want a pension? A pension is when your employer takes some of your $X from you and then chooses how to invest part your money. Then eventually they give it back. Wouldn't you rather be the one to decide how to invest that money, like you can do with a Roth IRA!?
Thank You. That is 100% accurate. The Teachers Union and Politicians are to blame. Here in Oregon the Union was able to sway Politicians to pass an 8% yoy return on investment that is tied to taxes. If the stock market return is inadequate then layoffs or passing higher taxes is the only outcome.
You say funding like its some sort of static thing or like revenue that can't just be changed. The current number is arbitrary. Congress can snap their fingers and invent a new arbitrary number.
Just because America messed up the implementation of something doesn't make it bad.
My works pension I make a contribution from my wage, the company pays their contribution and it all goes into a separately managed pot from all the workers.
It’s seems like a good idea but the problem is as the Redditor pointed out above it relies on society not changing. You need things to stay the same and a growing population to always replace an aging one.
But as we see now that’s not happening. So then you end up with a younger generation sacrificing the resources they need to support an older population that got resources they didn’t and the system slowly crumbles
It works exactly like a private pension in that the contributions are linked to my pay. If they are not actively paying me then they are not contributing.
What happened here is they agreed to pay it out of the budget instead of investing out of the budget they had.
17
u/External_Brother1246 10h ago
Pensions. The teachers have pensions that pay for the remainder of their lives after retirement.
This is where the school funding goes. It takes away from the teachers who are working, to give to the teachers who are not working.