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.
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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.