April 5, 2011

Blog: Teachers have bigger stake in pension cuts

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The teachers’ union has taken the lead role in the fight against cuts in state pension benefits, an understandable position, since teachers have more at stake.

The Maryland State Education Association has more members than any other union in the fight. Its members make more money on average than other government workers. And because of higher pay, they get higher pension benefits, according to figures from the Maryland State Retirement and Pension System.

The teachers’ union also led the successful effort in 2006, where the General Assembly unanimously improved pension benefits in exchange for higher contribution rates. The pension cuts and contribution hikes that are now close to passing in the legislature represent a significant roll back from those improvements.

Looking west from the State House steps, thousands fill Lawyer's Mall, Bladen Street and Rowe Boulevard for the "Keep the Promise" rally organized by MSEA last month.

Teachers in general have substantially benefited from the large increases in school aid that began eight years ago.

The state has several different retirement and pension systems. The “retirement system” was the original plan that was closed to new members in 1980, and it has better overall benefits.

Since 1980, any state worker or teacher must join the pension system established at that time. Those separate pension systems for employees and teachers now have the most members as members of the old system age and retire.

As of June 30 last year, there were 103,162 active members of the teachers’ pension system. Their average age is 44 and they make on average $58,000 a year. That salary is 50% higher than it was 10 years before that, and there are also 17% more active teachers in both the pension and retirement systems.

The 27,268 retired teachers (and beneficiaries, such as a spouse) get an average pension of $17,800 – about 56% more than retired teachers were getting 10 years ago.

Last year, there were 77,660 active members of the state employee retirement system, which also includes some local government employees. Their average age is 48 and they make an average salary of $47,300 – about 18% less than teachers, a spread that is a little wider now than it was 10 years ago. Unlike the teachers, whose numbers grew by tens of thousands, there are actually 661 fewer active state employee members in both the pension and retirement systems than there were 10 years ago, reflecting some of the personnel cutbacks in state government.

The 35,400 retired state workers get an average annual pension of $11,280, 36% less than teachers receive.

This growing difference between what teachers are paid and their pension amounts, based on contract negotiations with local school boards, and what state workers make and their pensions has led Senate President Mike Miller to consistently press to have the counties pick up more of the cost of teacher pensions. This idea was considered and quickly rejected by both the House of Delegates and the Senate in this year’s budget deliberations.

—Len Lazarick
Len@MarylandReporter.com

  • Tidewater

    Teachers who can not manage their own retirement out of their excessive salaries should not be teaching anyone anything. The state nor the counties should provide these people with a pension. Teacher salaries are high enough and a pension is not needed to attract teachers to the “profession”. We need to use any teacher retirement funds to provide parents with an educational voucher they can use to get an education they want for their kids instead of the current one size fits all approach.

    • Sigmund

      Obviously you have no real understanding of teacher salaries. I would also imagine unless you are a broker or stock trader, someone else is managing your money or you are keeping it in a safe place where no one could find it! If you can read this….Thank a teacher….charter schools and under paid un certified teachers that would be teaching your children in an “alternative” schooling system is a joke. Do the research….

      • Tidewater

        If you can read this thank your under appreciated mother and your overtaxed father. You can thank a teacher for voting lock step with Democrats who will raise your taxes to pay off teachers, I mean “Friends of Education”. Public education in Maryland is a rip off and would be a joke if it wasn’t going to bankrupt the State of Maryland. Do the math…

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