Well, another nail is being hammered in the NYC teaching profession as a long-term career choice with the new
"Tier VI" pension plan. For those aspiring teachers come April 1st (yes April fools day), any teacher hired for the NYC schools will no longer be able to retire at age 55/57 with 30 years of service. Instead, these teachers will need to wait until age 63 if they are to receive a full pension. What is even worse is that if a
"Tier VI affected teacher" wants to retire at, lets say 57 with 34 years of service, he/she would see their pension reduced by 37%. That is right, 37%! By contrast, a
"Tier V affected teacher" would get 100% of his/her pension.
"Tier V Teacher"....................................
"Tier VI Teacher".
34 year service............................................. 34 year service
Age Retires 57.............................................. Age Retires 57
Final 3-year FAS $100,000.................. Final 5 year FAS $100,000
Pension = $66,000..................................... Pension = $38,430
The difference is an astounding $27,570 annually. This is the difference between living well or struggling to make ends meet in retirement. Even if you look at the 25 year teacher who reaches full retirement age, the difference is significant.
"Tier V Teacher"....................................
"Tier VI Teacher".
25 year service............................................. 25 year service
Retires at age 62..........................................Retires at age 63
Final 3-year FAS $100,000.................. Final 5 year FAS $95,000
Pension = $50,000.................................... Pension = $41,563
The difference between the two pension is $8,437 annually and the
"Tier VI teacher" will need to work an extra year just to achieve that difference. Otherwise, if the
"Tier VI affected teacher" retires at 62, his or her pension will be $38,861 or a difference of $11,139 annually.
Realistically, most
" Tier VI affected newbie teachers" will not last 25 years, more like ten years or less. What will their pension be and how does it compare to a Tier IV pension which 90% of the teachers are under?
"Tier IV Teacher"....................................
"Tier VI Teacher".
10 year service............................................. 10 year service
Retires at age 55..........................................Retires at age 55
Final 3-year FAS $70,000.................. Final 5 year FAS $65,000
Pension = $8,534......................................... Pension = $5,428
Furthermore, the
"Tier VI affected teacher" will be almost doubling their contribution compared to the
"Tier V affected teacher" and four times the contribution that the
"Tier IV affected teacher" pays which 90% of the teachers fall under. The
"newbie teacher" contribution to the pension will be 3.5% and rise to 6% as the teacher reaches the $100,000 mark. Finally, the
"Tier VI affected teacher" will only get 55% of the final 5 year average salary, assuming they reach the age of 63 compared to 60% for the
"Tier V affected teacher" who only needs to reach the age of 62 or 57 with 30 years of service.
The NYC classroom is becoming an increasingly hostile environment and the Bloomberg Administration continues to scapegoat teachers as he refuses to treat teachers like other city employees by not offering a contract without outrageous
"givebacks". Now, the Governor has weakened the pension to a point that future retires will have a hard time reaching the age of 63 and with reduced pension benefits. The only one smiling is the Mayor as he is achieving his goal to make teaching in the NYC classroom a temporary position. As the economy slowly recovers who would want to be a teacher considering the deteriorating working conditions and now an inferior pension to boot.