Friday, November 27, 2015

How Much Is Your Pension Reduced By Taking A Loan Out At Retirement?

Some educators believe its a good idea to take a loan from their pension just before retirement and use that money to fund a large ticket item or invest it into the equity market.  These educators can take up to 75% of their pension money (QPP) out of the pension system and still get a good pension.  However, before an educator should take money out of their pension contribution, they should know how much their pension would be reduced on an annual basis.

Since most educators who want a full pension retire at 60 or later and want to get Medicare (65) and Social Security (62 to 70), I used the range from 60 to 70 years of age to calculate the amount an educator's pension will be reduced by taking out a loan just before retirement.

Age....Annual Reduction Factor.....% Reduced per $1000

FRA   Full Retirement Age and Reduced Social Security.
MED  Medicare
FSS   Full Social Security.
MSS  Maximum Social Security (32% greater than FSS).

 Let's look at three examples and how each would have their pension reduced by taking out a loan just before retirement,

For example let's look at educator #1,  She has reached retirement age of 62 years old and gets a full 25 year pension ($50,000).  She takes the maximum pension, with no beneficiaries.  However, she decides to take 75% of her QPP ($40,000) and use it to put a down payment on a retirement condo in Florida.

Pension - (QPP loan x % reduced) = Adjusted pension.

$50,000 - ($40,000 x 6.133%) = $47,547 .

 Therefore, her pension is permanently reduced by $2,453 annually. Moreover, unless the educator puts the QPP money she withdrew in a tax deferred account (IRA), she would need to pay taxes on the money.  Consequently, short term gain will result in long term pain from a reduced pension during her lifetime.

Then there is educator #2  who is 66 years old and he waited so that he could retire with full Social Security benefits.  He worked 20 years as a second career teacher and decided to rollover 50% of his QPP to an IRA so as not to be taxed on the withdrawal.. He will use the IRA to fund a custodial account for his grandchildren.  He took the option (option #1) that gives his spouse 100% of his pension if he dies.  Therefore, his pension is as follows:

(Pension x 0.85) - (QPP loan x % reduced) = Adjusted pension

($40,000 x 0.85) - ($20,000 x 6,885%)  =  $32,623

Therefore, his pension will be permanently reduced by $1,377 annually.

Finally, there is educator #3.  She has 30 years in the system and retires at the ripe age of 70.  She takes the maximum 75% QPP loan which, in her case is $50,000.  She wants to use the money to travel the world and doesn't care about reducing her pension or the tax consequences since she waited to this age to collect Social Security and will be subject to the RMD anyway next year.  She has no beneficiaries.

Pension - (QPP loan x % reduced) = Adjusted pension

$60,000 -($50,000 x 7.898%) = $56,051

Therefore her pension will be permanently reduced by $3,949 annually.

All three educator FAS was assumed to be $100,000 for simplicity.

I take no position on the taking of a QPP loan at retirement.  It's a personal decision that every educator must decide on.

Thursday, November 26, 2015

The Winners Of The 2015 Golden Turkey Award.

Today is Thanksgiving and its time for my annual turkey award for those leaders who have hurt education and made the classroom environment an unwelcome place to be. This year features a three time winner, an increasingly unpopular Governor, and a Mayor who can't seem to live up to his promises.

UFT President Michael Mulgrew:
Michael Mulgrew has done little to  gain member confidence and his arrogance when it comes to member complaints by trashing their e-mails has made him and his Unity caucus increasingly unaccountable for their actions.  Under Mulgrew the "Unity oath" is more important than member concerns and his support of Common Core and the APPR while refusing to support the growing "opt out" movement is at odds with teachers, the majority of the UFT.  Moreover, his cozy relationship with Carmen Farina and the failure to get the Chancellor to significantly change the DOE's "gotcha system" is proof positive of Mr. Mulgrew's uncaring attitude toward his membership.  Finally, his treatment of the ATRs by not only agreeing to make them second class citizens but has allowed the DOE to unleash the ATR field assassins on the ATRs to get them to resign or retire is unacceptable to many.  When was the last time Michael Mulgrew took the bull by the horns?  Instead he sits back and watches his members get gored.  This makes Michael Mulgrew a three time winner of the golden turkey award. A more complete analysis of Michael Mulgrew can be found in my series Here.

Governor Andrew Cuomo:
The Governor's onslaught on the teaching profession ended with the most punitive teacher evaluation system in the nation which allowed the "junk science" in the form of the "Value Added  Method" to account for 50% of a teachers grade. The result was an increased "opt out" movement and an erosion of the Governor's status in polls.  The fact that these high-stakes Common Core based tests did not count for the students.but only for teachers was a red flag for concerned parents who realized that teachers would forgo total education instruction in favor of the "drill and kill" test preparation for English and Math.  The result was an ever growing "opt out" movement and dissatisfaction with the Governor. Now the Governor is quickly backtracking and may eliminate his teacher evaluation tie-in  using VAM entirely.

Mayor Bill de Blasio:
To say the Mayor has been a disappointment is an understatement.  His failure to reduce class size and overcrowding is a glaring example of his inept administration.  Furthermore, the Mayor has lost the public relations war with the Charter schools and was made impotent by the pro-charter Governor. Under Bill de Blasio's handpicked Chancellor the Bloomberg era policies remain intact and the policymakers that gave us "fair student funding" and the "gotcha" system that's still in force.  Finally, the vastly inferior contract that he and Michael Mulgrew agreed to has allowed the City to have a $6 billion dollar surplus while resources remain scarce and school budgets frozen from the recession years as the Bloomberg education on the cheap policy continues under Bill de Blasio.

Tuesday, November 24, 2015

Has The Union Leadership Sold The ATRs Out?

I am increasingly concerned over the fate of many ATRs in rotation as they are being increasingly harassed by the DOE to include Danielson, Common Core, and rigor in their lesson, despite the ATR being subject to "the teaching for the 21st century"  Article 8j in the contract.  When ATRs complain to the union leadership about the unrealistic expectations that the ATR field supervisors assassins require, the union leadership just shrugs their collective shoulders and do nothing to help the ATR.

There are too many people contacting me about their field assassins giving them "Unsatisfactory" observations.  These field assassins find fault with the ATR for not giving a coherent lesson (Dainelson), classroom management, or rigor.  It matters little that in far too many cases the ATR is only providing the work the classroom teacher has left.  Since the ATR does not know the students and has no ownership of their grades, it is unrealistic to expect students to be well behaved and engaged in the assignment unless you are in one of the top schools in the city.  Yet the ATR field assassins demand this impossible task.  Moreover, if am incident with a student occurs and the building Principal gives the ATR a Letter-To-The-File, it automatically triggers an "Unsatisfactory" rating for that year!  Despite the ATR having satisfactory observations throughout the school year.  That means that the ATR cannot teach summer school, do per session grading, and other income producing activities in the DOE.  Finally, if the ATR takes more than ten sick days in any one year, the ATR will be rated "Unsatisfactory" by the field supervisor unless the ATR took FILMA (unpaid family leave).  I already know three ATRs who were rated "Unsatisfactory" for taking more than 10 sick days and one of them had 150 sick days in his CAR!

It appears to me that the UFT is not only looking the other way when it comes to the abusive ATR field assassins but is quietly supporting the DOE in their attempt to demoralize, defame, and destroy the ATRs and force them to either retire or resign by making them second class citizens and allowing the ATR field assassins to demand unrealistic expectations and when the ATR cannot possibly deliver, "U rate" them and possibly terminate them with two consecutive "Unsatisfactory" rating.

With friends like our union leadership, who needs enemies when you are a rotating ATR?

Sunday, November 22, 2015

The DOE Double Standard Continues Under Renewal Superintendent Amiee Horowitz.

Here will go again!  Another scandal has been exposed under renewal Superintendent Amiee Horowitz as she allowed a removed Principal, due to her alleged sexual misconduct with school personnel and a child's parent. to teach English at the nearly all male Automotive High School.  Yes, the very same Automotive High School that the DOE falsely promised to hire a top quality teaching staff only to fill the vacant positions with "newbie teachers" with no classroom experience and it seems a teacher who should not have any contact with students due to her alleged sexual misconduct.

The story starts with the then Leadership Academy Principal of Robert Wagner High School,  Annie Schmutz Selfullah being removed from her position as various allegations of sexual misconduct surfaced between her and a student's parent as well as other people inside the school. While you can say that they are all adults except that sex in the school is considered extreme misconduct and should have resulted in her firing, especially in the DOE's alleged zero tolerance policy that is not enforced for administrators. Moreover, her affair with a student's parent is unseemly.  The DOE removed the Principal but did not file 3020-a charges and said that she will never be put in a position that exposes her to children.  Yeah, right?

Now it appears the DOE quietly allowed Superintendent Amiee Horowitz and the embittered Principal of Automotive High School to quietly hire the ex-Principal as an English teacher.  Unfortunately, for the troubled school the students checked on her and found the sex scandal.   Ms. Selfullah left the classroom and ran out of the building when confronted with her past by her students.  The DOE claimed it was a mistake that Ms. Selfullah was assigned as a teacher.  However, one must think that a competent Superintendent and Principal would have done some checking and realized that Ms. Selfullah should not be with students.  Therefore, the blame lies with the renewal Superintendent Amiee Horowitz and the Principal of Automotive High School, Lafergola who did not do their "due diligence" or just ignored Ms, Selfullah's alleged sexual misconduct.  Either way, they are both culpable for the disgraceful action of putting, as the New York Post states "a cougar in a den of cubs".

Just another poor decision made by renewal Superintendent  Amiee Horowitz but then we all have learned that seems to be the a recurring pattern in her inept administration.

Friday, November 20, 2015

Why The NYU Study On The Closed Schools, When Replaced By Small Schools, Is Fatally Flawed.

This week, NYU released a study showing that students fared better with the closing of the many large comprehensive high schools and replaced by the Bloomberg small schools. The basis for the study's conclusion was the increased graduation rate from the small schools when compared to the closed schools.  However, the study is fatally flawed since the graduation rate is a bogus parameter and easily manipulated by the school Principal to allow students to graduate academically unprepared for college and career.  Let's look at how schools manipulate the graduation rate.

First, a little history.  During the 2002-08 time period the study looked at 29 closed high schools and the results for future students who instead went to the Bloomberg small schools which showed a 15% increase in the graduation rate.  However, the study admits that students who fled these closing schools did worse then the ones who stayed and graduated,  Moreover, these students who fled were academically behind their peers in the new schools they transferred to.

Credit Recovery:
During the time period the study covered there was an explosion of credit recovery courses that artificially increased a struggling student's credit accumulation.  Even the State finally saw the abuse of the credit recovery system and required the City to put an end to it in 2012.  The primary beneficiaries were the Bloomberg small schools who needed to have a high graduation rate to show how successful they were.  Therefore, they gave struggling students loads of "credit recovery" courses, many of them were bogus.  You can read some of the stories, Here, Here, and Here.

Principal Pressure:
The Bloomberg small schools were notorious in hiring "newbie teachers"  and since these teachers lacked tenure, they were pressured to pass along the school's struggling students.  Teachers who failed too many of their students were discontinued due to scholarship issues and were banned from working at the DOE.  This message resonated loud and clear with the inexperienced staff and resulted in high graduation rates despite these students academically unable to succeed in college or careers.

Student Selection: 
To ensure the Bloomberg small schools would succeed they opened with some very significant advantages like excluding many ELL;s and Special Education students the first few years of their operation.  Further, they limited "high needs" students (namely level 1's) and were given 110% of the resources allocated to the school of similar size and student demographics.   These significant advantages were, in contrast to the higher levels of "high needs" , ELL's, and Special Education students that were in the soon to be closed large comprehensive large schools.  Moreover, these soon to be closed schools were starved for resources and averaged 80% of what similar large comprehensive schools received.  The Bloomberg small school I am in for this year is a prime example as they were once a high achieving school in the mid 2000's, when it first opened.  and now they struggle to get even mediocre, students to go to the school as their funding advantage disappeared and they could no longer exclude students. The resulting influx of "high needs" students has destabilized the school environment.

When you put the three aspects together, the bogus "credit recovery" programs, Principal pressure to  graduate academically unprepared students, and the deliberate advantages that the Bloomberg administration bestowed on his newly created schools, you basically are getting a higher graduation rate at these small schools, when compared to the closed large comprehensive schools.  However, what's more telling is the low college and career readiness scores that show that many of the Bloomberg small school are graduating students who are unprepared for college or careers in the adult world. That's why the NYU report is fatally flawed.

Tuesday, November 17, 2015

School Overcrowding And Larger Class Sizes Is The Hallmark Of The De Blasio Administration.

Despite assurances and campaign promises by Bill de Blasio to reduce class size and build more classrooms to alleviate school overcrowding, it turns out that class sizes have actually risen and school overcrowding continues unabated.

First, the New York City Public School Parents blog shows that class sizes have actually rose during the first two years of the De Blasio/Farina Administration.  According to the blog, the DOE's own 2014-15 data shows that class sizes rose 0.1 to an average of 26.4 students per classroom from the previous school year and since the 2007-08 school year, the average class size has increased an astounding 8.32%.

Second, there are 540,000 students who are attending overcrowded public schools or about 50% of the New York City Public School students.  Worse are the schools in the immigrant communities where for every 1% increase in the immigrant population, there is a need for 100 more classroom seats.  Unfortunately, the City only projects to add 33,000 seats when the minimum needed is 49,000 and some groups claim it should be 100,000 new seats to account for the under counting of illegal these largely immigrant communities.

Finally, unreasonably tight school budgets that average 14% lower than in 2007-08 and kept frozen the last two years despite the City's 6 Billion dollar surplus along with the unfair fair student funding  continued school overcrowding and large class sizes will make student academic achievement a struggle.

Sunday, November 15, 2015

It May Be A Different Administration But When It Comes To Teacher Discipline, It's The Same Old DOE!

The end of the Bloomberg administration was greeted with universal joy by the teachers and other staff members of the New York City Public Schools.  Even principals, except for the Leadership Academy graduates, were happy to get rid of the Bloomberg policies that hurt their schools.  However, educator joy has been replaced by a realization that for the schools little has changed.  The class sizes have remained unreasonably high, school budgets were frozen at the  recession levels of 2012, paperwork has not been reduced and even increased for Special Education teachers, and  much of the Bloomberg policymakers are still in charge.  When it comes to teacher discipline, the amount of 3020-a hearing have remained essentially unchanged from the last years of the Bloomberg administration.

The DOE's Office of Legal Services will go to great lengths to terminate a teacher by embellishing, perverting, lying, and falsifying innocent actions into serious misconduct. This is typical of this office during the Bloomberg years and unless the teacher was willing to fight the 3020-a charges, many were not and took a settlement to retire, resign, or plead guilty to keep their job and be thrown into the ATR pool, they would be reassigned for a year or more waiting to defend themselves and require the DOE to prove their case. Unfortunately, only 4% are found innocent since the State Arbitrators are appointed to one year terms and either the DOE or UFT can refuse to reappoint the Arbitrator.  Therefore, the Arbitrator will usually give a fine to teachers even when the DOE did not prove their case.  On the other hand, about 8% of the educators are terminated but when you add the resignations and forced retirements, the number jumps to 55%!  Our out of touch leader, Michael Mulgrew, promised a new tone at the DOE, instead we see that Chancellor Carmen Farina, is part of the problem and not the solution as she retained the Bloomberg 300 in their policy making positions. Is it any wonder that the classroom teacher sees little change in the "gotcha mentality" coming from the DOE?

Now the New York Post reports on a 60 year old teacher who was forced to resign under the threat of termination by the DOE.  The teacher, a 29 year teacher who was legally blind and walks with a cane was charged under 3020-a with DOE trumped up charges of drinking alcohol and sexual harassment.  What did this teacher do?  A parent thought she smelled alcohol on the teacher's breath when it turned out that he had a bad breath issue and used Listerine, which is alcohol based (25%).  Yet, the DOE didn't buy it.  The Office of Legal Services believed the parent and reassigned the teacher to the "rubber room" yes, they still exist.  The DOE eventually charged the teacher under section 3020-a with drinking alcohol on school grounds and added sexual harassment charges to boot.  What was the sexual harassment? . The teacher was joking with a group of moms and asked them who wants a blind date with me?  Even if he wasn't joking, what's wrong with one adult asking another for a date? The teacher retired hoping that his good name will remain undamaged.  However, if he tries to get a job with the DOE or DOE provider, he will find he cannot be hired since the DOE will have put a "do not hire" flag on his file.

This is just another of the many questionable cases the DOE's Office of Legal Services brings to intimidate teachers and force them to retire or resign rather then going through long and demoralizing 3020-a hearing where your moral character is made out to be a cross between "Jack the Ripper" and "Typhoid Mary" besides being a danger to the children.  It may be a new administration but for teachers in the trenches facing discipline, it's still the same old DOE.