Wednesday, January 14, 2015

Teacher Retirement System Under Attack

The teaching profession has been under attack for several years now by the Jindal/White administration. Thousands of excellent teachers have retired before they had planned to because of the punitive, impractical, evaluation system, the insanity of constant standardized testing and test teaching and the inappropriateness of Common Core for many of our students.

Now it looks like the enemies of public education on BESE, in the LDOE and the various school privatization forces are itching to dismantle the teacher retirement system. (See this article in the Advocate and read the comment by former school board president Noel Hammatt) Even though the constitution stipulates that the legislature is responsible for the funding of the retirement systems, for years now the legislature has passed on much of the unfunded liability it created to local school boards. The local school boards have no say in curtailing excessive benefits granted by the legislature to privileged individuals such as overpaid college presidents and former legislators who get jobs in the retirement systems near the end of their careers just to milk the retirement systems of excessive benefits. Yet the legislature is now passing on these extra costs to school boards and other non-state agencies. Last year school boards were forced to pay almost one third of their payroll for benefits that should cost about 8% of payroll. That’s because school boards are being required to pay for abuses the legislature approved for fat cats.

But the situation is even worse.  At the same time the legislature was assessing local school boards an outrageous penalty for unfunded liability, they were exempting all charter schools from having to pay anything toward the unfunded liability by giving them the option to exempt their employees from the retirement system. This gives these privately run for-profit groups a 25% gift, which they can use to pay their managers exorbitant salaries or return a bigger profit to shareholders. In 2008-09 Charles “Mickey” Landry was paid $186,000 for being principal of a charter school in New Orleans.  He is probably getting a lot more now. The Choice Foundation can easily afford such a salary because they save about $12,500 in retirement contributions for every teacher they hire. Meanwhile for every new teacher that is pulled out of the retirement system, the unfunded liability burden gets greater on our local school boards. They don’t have the option (and they don't want) to pull out of the retirement system.

If the drain on the retirement system continues as privatization grows, at some point our anti-public school BESE will propose a reduction in retirement benefits for public school teachers. LABI and CABL have been itching for years to see teacher retirement benefits reduced (Just like the Group Benefits overhaul). This is the opposite of what we should be doing if we want to build a dedicated effective, professional teacher force in Louisiana.


Anonymous said...

So, if they do an audit and find it is in bad shape because the state hasn't paid their share of our retirement costs...could we get reimbursed?

Or, if they find it in better than expected shape (which has been the mantra for the past 20 years, something about fortunate/safe investments)...will they find a way to steal from our amassed glory (much like they did with our health insurance)?

Every 4-5 years, "they" try to combine TRSL (which has been in better than average condition with the other state retirement programs (state police, LASERS, etc) that are other words, use our well run TRSL to bail out those that made more risky investments.

Michael Deshotels said...

Anonymous, I agree with you that we probably have a legal case for requiring the legislature to pay their fair share of the unfunded liability that they caused. I know school boards are reluctant to file suit because they may have to face retaliation from the legislature. The legislature has been cutting higher Ed to the bone because they and Jindal broke the agreement that was made when the Stelly plan was passed. Now the rich have been relieved of the burden of paying a fair share of the bill for education