Teacher Made Over $80K Per Year, Retires With a Pension of Over $40K — Claims 'Violation of Trust'
Article analysis takes on educators paying 5 percent of pension costs
Does a teacher who made $81,000 before retiring to a $41,400 a-year-pension have a valid complaint that she wasn’t paid enough?
That was the focus of a recent story in The Bridge, The Center For Michigan’s news site, in which former Royal Oak teacher Kathy Kapera was featured. The article said that Kapera thought the lucrative retirement benefits teachers receive “would make up for the relative lack of financial compensation she would earn as a teacher.”
The article didn’t give Kapera’s salary other than stating what she earned in 1976 when she first started as a teacher. The article didn’t state what her annual pension would be, but reported what the average pension was for public school employees, which is about half of what a teacher with Kapera’s experience would actually receive.
A teacher with 32 years of experience — which is what Kapera had — would have made a top-of-the-scale salary of $81,000 in 2010, according to the Royal Oak teacher’s union contract.
Based on her salary and the pension formula (which the story pointed out included an early-retirement sweetener), a teacher with 32 years of experience at Royal Oak would have a pension of about $41,400 a year, said Michael Van Beek, education policy director at the Mackinac Center.
Kapera’s estimated pension would be more than five times that of an average private-sector pension. According to a Congressional Research Service 2008 report, private-sector median pensions were $7,584 a year. In four years, Kapera would be eligible for Social Security. According to the Social Security Administration, the average annual benefit for a retired worker in the U.S. in 2012 was $14,760.
In 1976, her first year as a teacher, Kapera said she made $7,000. The story cites that salary twice in building the teacher’s case about her “lack of financial compensation.”
But how much was $7,000 in 1976? According to the March 1977 current population survey, the average salary in Michigan for a one-person household in 1976 was $7,400.
Kapera’s salary would not have stayed at $7,000 for long, if she was paid an average salary for a Michigan teacher during her career. By 1980, the average teacher’s salary in Michigan was $19,663, according to the National Center for Education Statistics.
By 2010, Royal Oak Public Schools was paying a teacher with Kapera’s education and years of service at least $81,000. The average teacher’s salary in the U.S. was $55,202 in 2010, according to the National Center for Education Statistics.
“To say she was undercompensated and because of that she should have ironclad benefits is ludicrous,” said Charles Owens, president of the Michigan chapter of the National Federation of Independent Business. “Are you kidding me? $81,000? That ain’t chump change. There are a lot of people who would love to have a salary like that.”
The article didn’t state what Kapera’s pension was. It did say the average pension payout for public school employees was $20,316 in 2010. But that average figure includes janitors, bus drivers and part-time employees whose salaries also factor into the pension calculation and are much less than teachers. Also, some retirees are eligible for a pension with as few as five years of service, which greatly reduces their pension.
The Bridge article was about the Michigan legislature’s attempts to delay health care benefits for public school employees to age 60.
Kapera couldn’t be reached for comment. Sid Kardon, president of the Royal Oak Education Association, said he had no way of reaching Kapera. Kardon didn’t respond to an offer to comment.
Derek Melot, senior editor of The Bridge, didn’t address specific question about the story but referred to the package of four stories The Bridge ran on the effort to reform Michigan Public School Employees Retirement System.
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.