Pension problems pervasive
March 10, 2011
Filed under News Archives
By Blair Donald
Round Table editor
Wisconsin is in turmoil. The state government has a huge amount of debt and has decided to try and pay it off by disbanding all state employee unions. This would save the state money because unions could no longer bargain for pay raises or pensions. However, unions are an integral part of an industrialized society; they were created to prevent mistreatment of workers. In America, a country founded on civil rights, taking away pensions is seen as a breach of that principle. Wisconsin state employees – including teachers – are up in arms, protesting at the state capitol and going on strike.
Maryland is also facing a budget crisis and the General Assembly – Mayland’s legislative body – is concerned that the state pension system is underfunded. While there are no bills in the General Assembly to disband public employee unions, there are bills that will change the pension system. Members of the Frederick County Teachers Association met with state delegates and senators on Feb. 28 to discuss the issue.
Pensions are a retirement system in which 5 percent of a teacher’s salary goes to the state pension fund, and the county matches it. It’s usually a total of 10 percent a year, and the fund grows as that money is invested; when a teacher retires, money is drawn out of the fund as their pension. Teachers receive about half of the average of their top three years of moneymaking every year after they retire, though that number could be changed because of the Cost Of Living Adjustment (COLA). A teacher must work 30 years to retire; every year the teacher works after that, he or she gets about 1.8 percent more per year than usual from the pension fund. Possible changes to the system would require teachers to pay into the fund 7 percent of one year’s salary rather than 5 percent per year but get less back. It would also take longer (five to 10 years) to get vested. Being vested means that the money a teacher is paying now actually counts toward his or her pension; before a teacher is vested, he or she pays the fee but does not get anything out of it. Another change might also require teachers to work more than 30 years in order to receive a pension.
Twenty-four teachers, administrators and teaching assistants attended the meeting. Maryland State Education Association lobbyist Sean Johnson began the meeting with an introduction and told teachers “not to listen to throwaway lines about ‘what you need to do to improve your pensions.’”
Johnson also said that the teachers were there because educators have “done our part.” He said to the politicians, “Now, you do yours.”
The educators’ campaign revolved around the phrase “keep the promise,” meaning that the union members were promised that if they were to pay more of their salary, it would fix the system, and their pensions would not be in danger.
Delegate Michael Hough of Frederick County district was the first politician to arrive. He is a “freshman” politician who has been in office for only 45 days, and said he is still in the learning process.
Hough admitted that the proposed plan would involve teachers paying more money to get the same amount of pension money that they are currently getting, or pay the same amount to receive less.
Mike Bunitsky, a social studies administrator with 36 years of service, said that he “came to Maryland because he believed that it was much more functional to have the state backing the pension system than local districts doing it.”
To Hough, he said, “I’m not even sure if you’re 36; I’ve been teaching longer than you’ve been alive.”
Hough responded that he had been paying attention during his short term, and that he had noticed that although the state budget has increased, there have been cuts on the local level, such as cuts to road maintenance and public safety.
“It surprised me,” he said.
Tuscarora High School social studies teacher Glen Blanchard told Hough, “Remember what impacts us impacts your own child at schools.” One teacher present at the meeting taught Hough’s child in a first-grade class.
Delegates Kathy Afzali and Galen Clagget attended the meeting a few minutes late.
Afzali said, “It seems to me that counties like Frederick County would pay less because other counties have these cushy retirement packets that Frederick doesn’t have but is helping to pay for anyway. The counties with these packets should be the ones to pay the difference.”
Gary Brennan, president of the Frederick County Teacher’s Association, was very opposed to the pension cost shifts; he said that they could be devastating.
“The state has the obligation to keep teacher pensions,” he said. ”They say they have no control over it, but they do; they vote on it. I feel that it is a state obligation and should remain there because counties are struggling as it is.”
A section of the state proposal plans to shift control of the pension fund to the counties rather than the state. “You’re just shifting the burden,” said Brennan.
Maryland State Sen.David Brinkley was direct when addressing the room. “Promises have been made to you that we can’t afford to keep,” he said in reference to the “keep the promise” slogan used by the teachers. “Maryland is not as bad as Illinois, California, or Wisconsin,” he said. “You don’t want another Wisconsin.”
“Another plan could be a median, a line where the state pays everyone up to the median,” he added, “but your participation in paying could increase more than the median.”
“Many long range plans like this can actually hurt educators,” said FCPS teacher Joyee Lenzo. “I understand that you can’t afford to keep the promise and I want to be able to explain that to the people I work with, but I can’t because I feel information is being locked in.”
Brinkley responded, “What you just said was beautifully political and accurate. We made a plan in 2006 to increase the multiplier, and this will collapse on its own weight.”
“We have to keep the promises that are there and make sure that it’s affordable, not just the pensions but plans like healthcare.”
Brennan told Brinkley that he was “using the crisis in Wisconsin to crush the union here.”
Brinkley said that the unions had lied to the teachers, that they had been kept in the dark about pensions and that the union leaders had known about the situation long before the debate had risen.
Blanchard spoke in defense of the union, saying, “The union is not lying to us, they have never lied about what is in the legislature. They are not making up statements because they feel obligated.”
The senator spoke up again. “My whole thing last year was to try and be a wake-up call, to try and get people to pay attention to the damn thing. People were saying that they’d get past the election and then deal with it, but the problem has only gotten worse.”
FCPS employee Karen Yoho asked if the state would continue to match what the teachers were paying. Brinkley did not respond directly to the question but said that there have been complaints for a long time.
“Maybe you don’t hear it, but I hear it,” he said. The reaction to that statement was strong with many shouting out, “I hear it!” and challenging his understanding of the question.
Brinkley said his ex-wife, who had a law degree and applied for a teaching job but was rejected, went back to school to be a nurse.
“You have to be qualified to teach; you can’t just show up and read out of a textbook”, said Sherry Angelety- Haydel, FCPS reading intervention teacher.
Brennan said that the pension system would not be totally demolished, and the senator agreed, saying that it would merely change.
Brennan also made the point that if more teachers quit, class sizes would increase more than they were already expected to, and that this could be detrimental to children’s education. “2014 still comes, and every kid is going to be average,” he said.
Clagget said to the group, “You may not like it, but the idea is to work with us while we improve the system.”
Afzali brought up private sectors and was interrupted by Yoho. “Excuse me, we’re not private, we’re public,” Yoho said.
Afzali continued, “You’re not the only people hurting right now. The private sector is in such distress, nobody is getting a raise, and eventually it erupts into this massive furor. The system is bust, it’s all falling apart, it’s unraveling as we speak. This won’t be fixed until we fix the private sector, and I’m not seeing the fundamental change we need in the system. It’s all just being glossed over as if it will fix itself.”
Daniel Erick, a younger teacher who has taught for four years, said that the situation has discouraged him and that he would discourage others from teaching if the situation continues to deteriorate.
“I’m really thinking of going” he said, adding that his parents have a business that was closer to his home and he could make more money working there, but he had giver that up because he love to teach. “It’s important to understand that we (younger teachers) are the future and it’s getting to the point where we can’t afford to teach anymore. Why does this want to bring me to Frederick, Maryland? It doesn’t, and I have nothing to lose if I leave.”
He asked about pensions for younger teachers, as he was still unvested and was unsure if the pension changes would affect him. “Do I start all over?” he asked. ”It’s very important to listen to [younger teachers], if you talk about pushing funds out of our reach, we’re gone.”
Angelety-Haydel said that she was in the middle of her teaching career, and that it seemed to be an uphill battle for her.
“Look, I am a single parent, and I have to be able to pay for my children’s education and to be able to support them now, as well as life after my retirement,” she said. ”The bottom line is, I’m not asking for a pay raise because I understand that it’s difficult, but I can’t afford to keep having my pay taken away. All I care about is my children.”
There was a question about the poverty level of pay ($17,000 per year for one person, $40,000 a year for a family of four), and a few teachers in the room said that they were getting just above the poverty level, that they had just gotten above that level of pay, or that they knew someone who was at that level or below. These people would be the ones most affected by the pension cuts, as they may depend on pension money to survive after retirement and/or could not afford to pay more into the pension fund than they were currently.
Jerry Donald, a social studies teacher at Middletown High School, talked about the numbers involved in the pension issue. “The system needs a 7.75 percent return on investments to be funded. We are averaging 9 percent over the last 30 years (meaning that the state is getting more than it needs). Why is it underfunded?” he asked.
Brinkley responded, “We lost our fannies in the market. The rates will come back down when the market comes back.”
Both sides repeated statements. The senator and delegates said that “Maryland is not Wisconsin,” and the teachers asked “We kept our promise; why can’t you?”
“To make a long story endless,” Clagget said, “we’ll see what happens at the table between the senate and the house. I think the house will win. If there is a dump to the locals, I’ll be surprised, but I’m wearing rose-colored glasses.”
Maryland State Sen. Ron Young arrived and said that it wasn’t a quick fix, but even if nothing happened by 2023, the state would be back to 80 percent.
Brian Dwyer, another younger teacher, said that Maryland had the number one education system in America. “I pose a challenge to the number one education system in America. We could be the leaders, Maryland could be the example of where education should be, but we can’t do that if you’re taking away from the educators. Teaching is not just something people can step in and do.”
“The biggest problem in the USA is that we’re polarized in so many different directions, we haven’t chosen to keep moving forward because of roadblocks,” said FCPS teacher Jonathan Araujo. “I understand the position you’re in, but can you at least help us by supporting and believing in us?”
Brinkley ended the meeting, saying, “The key is, it doesn’t matter where we were; we’ve got to look at where we are and what can be done about where we’re headed.”