Doing the math on teachers’ pensions
Re “Can State Win Its Pension Gamble?” Aug. 14
Apparently neither the legislative analysts nor The Times has ever heard of the Social Security offset against government pensions, including state teachers’ pensions. This requires offsetting two-thirds of any “government” pension against any Social Security payments. This frequently wipes out any Social Security payment. Your quoted forecast for a typical employee includes Social Security benefits without any mention of the offset.
HARRY E. DEPASS III
As chairwoman of the 12-member California State Teachers Retirement System board, let me assure Californians that they are winning with the teachers’ retirement system -- without gambling. We have exceptional returns on our broadly diversified, thoroughly researched and professionally managed investments -- more than 13% for the last three years. Although the public pension debate continues, the value of a defined benefit pension is indisputable. We are among the strongest of U.S. pension funds, with an 86% funding ratio, but we know positive returns alone cannot bridge our funding gap. In a comprehensive approach to reach 100% funding, we are working with our members and the Legislature to make incremental changes to the system.
The average teacher retires at age 61 with more than 25 years of service and receives about 60% to 65% of pay, for an average monthly pension of $2,600. He or she earns no Social Security for his or her CalSTRS-covered employment, and increasingly has no retiree health insurance -- which, for teachers, is determined by local school districts.
As fiduciaries, our duties of loyalty and prudence are to those teachers. We have no intention of gambling with their retirement security.
Chairwoman, California State
Teachers Retirement System Board