Retired Educator Says He 'Would Not Have Gone Into Teaching' With Proposed Pension Reform
A retired Michigan teacher says he wouldn’t have gone into the profession had he known his payments for his health care in retirement were going to cost about $116 more a month than what he thought he'd have to pay.
A teacher’s pension with 30 years of service from his school district would be more than four times higher than the average private sector pension in the U.S., according to a Mackinac Center for Public Policy analysis. Pension and health care benefit packages for teachers and other government employees generally far exceed the benefits of most private sector workers.
Jim Pierson, the retired Huron Valley teacher mentioned above was highlighted on the website of the Michigan Education Association, which ran a story highlighting the testimony of Pierson talking about Senate Bill 1040, which increases public school employees’ contributions to their retirement.
The MEA wrote: "Retired Huron Valley teacher Jim Pierson called SB 1040 an example of ‘bait and switch.’ "
“Since I retired in 2010, I’ve been hit with a tax on my pension. Along with other increases, my out-of-pockets costs have doubled," the MEA quoted Pierson as saying. "I didn’t go into teaching to get rich. I sacrificed lower pay for greater security. None of this was in my retirement plans. If I had seen this coming, I would not have gone into teaching.”
MEA Spokesman Doug Pratt didn’t respond to an email seeking comment.
Michael Van Beek, education policy director at the Mackinac Center, estimated that a retiree from Pierson’s school district with a two-person health care plan would see monthly premiums increase from about $155 a month to $271 a month. If that employee was on Medicare, the monthly payments would be significantly less, Van Beek said in an email.
The MEA also quoted Gary Olson, senior policy fellow at Public Sector Consultants, as saying the average pension was $20,000 a year, which “barely keeps a couple above the poverty line.”
However, according to a Congressional Research Service 2008 report, people with government pensions had a median pension of $18,000 a year while private-sector median pensions were $7,584 a year.
A Huron Valley teacher at the top of the pay scale with a master’s degree would earn $70,260, and with 30 years of service would receive a pension of $31,500 a year, Van Beek said. That pension increases 3 percent every year.
Leon Drolet, chairman of the Michigan Taxpayers Alliance, took exception to Pierson’s claim that he sacrificed lower pay when he went into teaching.
"It’s a long-standing urban legend that teachers say they aren’t making as much in the public sector than if they worked in the private sector," Drolet said.
He pointed to the arguments that the MEA has made for years that outsourcing public school jobs via privatization meant lower pay and benefits for school employees.
“These folks honestly believe these things," Drolet said. "They are actually indignant because they are so far removed from the realities of the rest of society.”
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.