Bill: my interpretation of Fact# 4 is that the growth in plan assets this year exceeds the growth in plan liabilities this year by $25M. If that is correct then that is a little good news and suggests that things are “stable” at least for this year.
Your numbers prove that it would be irrational to expect to solve this problem through growth in assets. This problem can only be solved by addressing the liabilities that are associated with the plan. That means the benefits that are “earned” must be reduced to match the contributions that are made. In particular the existing pensioners are being paid pensions that are not supported by their contributions in the past. To expect the current teachers to make up the shortfall attributed to their predecessors is totally unjustified. Therefore the current pensioners must be part of the solution.
What would be helpful is some analysis of alternatives. For instance what happens to the unfunded liability for every 1% decrease in current pensions? What happens to the unfunded liability if all indexing is ended? What happens to the unfunded liability if service requirements for qualifying for a pension are changed? There are many alternatives that can help solve the current problem. It is obvious there is no one solution, several bullets are going to have to be used up to start to address this massive problem.
But you are correct it is past time for this debate to begin.
Barry H
Thank you very much for writing this column and helping to bring more attention to this crisis.
My wife is a recently retired teacher and we (like thousands of others) are counting on her pension to help fund our retirement.
I began searching for the 2013 Teachers Pension annual report approximately 3 months ago on line. About 3 plus weeks ago when it still wasn’t there I wrote to the agency asking why it wasn’t on line yet and how could we could receive it. After several silly responses from someone who obviously had no idea what I was asking, I finally got a response from someone else saying it was now available on line. I checked and sure enough it was there with the “NEW” icon next to it, nearly 5 months from the end of the year 2013. Am I the only one out there that cares about this, besides you?
This lackadaisical action on the reporting seems to be consistent with the overall management and attitude from the parties charged with stewardship of this large pension. This problem should have been addressed many years ago and those that didn’t manage and rectify it effectively, relieved of their duties. In particular the recent comments from the current minister are completely irresponsible and very misleading. This ticking time bomb must be dealt with immediately and appropriately by the current minister, or she should resign her position to someone with enough courage and skill to accomplish the task. I am reminded of the saying “what you resist, will persist”, when it comes to the teachers pension.
My wife (and undoubtedly most if not all other teachers) would gladly have contributed much more to her pension many years ago to ensure its long term health, and the potential for indexing increases, had this opportunity been available and more transparent to employees. It is truly alarming to be in a position where your future financial survival is in the hands of people who just refuse to act appropriately and competently, in a timely manner, despite written agreements requiring them to do so.
We can only hope someone, somewhere in a position of authority will finally act and help those deserving of their attention. Reading your newspaper column gave us more hope that the squeaky wheel will get some grease.
This is indeed a gloomy but realistic assessment of this Teachers’ Pension situation and clearly some restificating measures are overdue..Sadly the recent handling of the totally useless course issue by the Minister of Education only tends to make an already very troubling issue somewhat worse…It is time for the McNeil government to step up and demonstrate effective leadership in addressing this matter…
Comment
Bill | May 18, 2014 |
Bill: my interpretation of Fact# 4 is that the growth in plan assets this year exceeds the growth in plan liabilities this year by $25M. If that is correct then that is a little good news and suggests that things are “stable” at least for this year.
Your numbers prove that it would be irrational to expect to solve this problem through growth in assets. This problem can only be solved by addressing the liabilities that are associated with the plan. That means the benefits that are “earned” must be reduced to match the contributions that are made. In particular the existing pensioners are being paid pensions that are not supported by their contributions in the past. To expect the current teachers to make up the shortfall attributed to their predecessors is totally unjustified. Therefore the current pensioners must be part of the solution.
What would be helpful is some analysis of alternatives. For instance what happens to the unfunded liability for every 1% decrease in current pensions? What happens to the unfunded liability if all indexing is ended? What happens to the unfunded liability if service requirements for qualifying for a pension are changed? There are many alternatives that can help solve the current problem. It is obvious there is no one solution, several bullets are going to have to be used up to start to address this massive problem.
But you are correct it is past time for this debate to begin.
Barry H
Barry H | May 18, 2014 |
Thank you very much for writing this column and helping to bring more attention to this crisis.
My wife is a recently retired teacher and we (like thousands of others) are counting on her pension to help fund our retirement.
I began searching for the 2013 Teachers Pension annual report approximately 3 months ago on line. About 3 plus weeks ago when it still wasn’t there I wrote to the agency asking why it wasn’t on line yet and how could we could receive it. After several silly responses from someone who obviously had no idea what I was asking, I finally got a response from someone else saying it was now available on line. I checked and sure enough it was there with the “NEW” icon next to it, nearly 5 months from the end of the year 2013. Am I the only one out there that cares about this, besides you?
This lackadaisical action on the reporting seems to be consistent with the overall management and attitude from the parties charged with stewardship of this large pension. This problem should have been addressed many years ago and those that didn’t manage and rectify it effectively, relieved of their duties. In particular the recent comments from the current minister are completely irresponsible and very misleading. This ticking time bomb must be dealt with immediately and appropriately by the current minister, or she should resign her position to someone with enough courage and skill to accomplish the task. I am reminded of the saying “what you resist, will persist”, when it comes to the teachers pension.
My wife (and undoubtedly most if not all other teachers) would gladly have contributed much more to her pension many years ago to ensure its long term health, and the potential for indexing increases, had this opportunity been available and more transparent to employees. It is truly alarming to be in a position where your future financial survival is in the hands of people who just refuse to act appropriately and competently, in a timely manner, despite written agreements requiring them to do so.
We can only hope someone, somewhere in a position of authority will finally act and help those deserving of their attention. Reading your newspaper column gave us more hope that the squeaky wheel will get some grease.
DH | May 18, 2014 |
What would happen in the private sector ?
PS | May 16, 2014 |
This is indeed a gloomy but realistic assessment of this Teachers’ Pension situation and clearly some restificating measures are overdue..Sadly the recent handling of the totally useless course issue by the Minister of Education only tends to make an already very troubling issue somewhat worse…It is time for the McNeil government to step up and demonstrate effective leadership in addressing this matter…
bob mackenzie | May 16, 2014 |