The vast majority of veteran teachers in the New York City schools are under the Tier IV pension plan and there is an assumption that all the Tier IV teachers get the same benefits and that is correct. However, the employee contribution rate and vesting periods change, based upon when one enters the system. Depending on when you join the system determines the amount an employee pays into their pension and how long it takes to be vested. The table below lists the membership date, vesting.and contribution rate.
Membership......Vesting........Vesting...........Contribution
....Date............Pension.........Health.................Rate
< 4/1/2001......5 years.......5 years........3% first 10 years
< 3/1/2008......5 years.......10 years......3% first 10 years
>3/1/2008......5 years........10 years......4.85% first 10 years.
............................................................1.85% for 27 years.
>12/10/2009..10 years.......15 years.....4.85% first 27 years
...........................................................1.85% thereafter.
White all the Tier IV members are under the same pension plan and get the same benefits, depending on one's membership date. The vesting period and contribution rate are different as the later one joins the pension system, the higher the contribution rate and the longer the vesting period is. If you want to know how much a pension you would get, based upon your three year final average salary and years in the system, see my post Here.
Note: Some Tier IV teachers who joined the system before March 1, 2008 could voluntarily join the 25/55 program and pay 4.85% for the first 10 years and 1.85% for the first 25 years. Then pay nothing beyond 25 years.
22 comments:
It's interesting to note that it takes longer to vest in the health and pension system now than it did in the previous decade. Most new teachers entering the profession will not make it 10 and 15 years which becomes a great windfall for the city and state because they wont have to pay these benefits for life and they get to use teachers as expendable labor. With tenure becoming more difficult to attain, they can use a teacher for a number of years and then dump them with the state and city owing them no permanent benefits. It's another example how this education reform movement, in league with the federal, state and local governments across USA, is hell bent on destroying public education to save money and privatize education (Charter schools). I think they care very little about education or improving it in the urban areas. All they want to do is save money at our expense.
BTW
Chaz you are awesome!
Sincerely,
A Disgruntled Teacher at Flushing High School
Re 25/55; I never understood why people would want to pay alllll that extra into their pension over the course of their career, only to receive a pension of 50% after 25 years -the amount they would normally receiev after 25 years of service anyway. Seems silly. Of course, I'm out at 59 1/2 with my full thirty so the 3% over ten years made much more sense to me and 25/55 seemed like a loose loose.
Consistently, you are the only source that explains the benefits and pitfalls simply, clearly, and usefully. Thanks, Chaz!
If the Friedrich case in California goes through and the NYC teachers become "at will" employees, will there be any effect on our pensions? I am in 25/55 with ten years to go till retirement.
I am in 25-55 as well. I will retire at 55 with 27 years of service in ten years. Is the poster above correct? Is 25-55 a bad deal? I have already worked 16 years for the DOE. Should I drop out of 25-55 and just take a "regular" pension. A tad confused here. Any info is appreciated.
Wow! Thanks Chaz, you are the greatest when untangling the bullshit the union gives out.
I didn't take the 25/55 as I was advised not to, due to my own circumstances. At 55 I will have 32 years so it made no sense for me. That's 60% at 30 years AND an extra 3% (1.5% each year) for the extra 2 years. Not bad, 63% at 55. Top pay + per session = approx 63% of 150K. And people are complaining? 75 degrees on Columbus Day and my Wall Street neighbor will get home around 7pm tonight. It ain't that bad. Stop whinning!!!
You cant opt out once in.
and its not a bad deal depending on where you age and or years of service wise.
The 25/55 option only made sense to 40% of the teachers at the time. If you started in your early to mid twenties it made no sense and if you didn't reach 25 years before 62 it also made no sense.
Anon 12:56 I hear you. I was wondering how you arrived at 150K but I can see that top pay plus per session and maybe summer school, etc can easily hit 150K when salary increase hits 120K in 2 years. Nice job. Good for you.
Chaz...
With regard to your analysis of 55/25 (1:29 pm), there's also another interpretation......the DOE and UFT are working together to fire tenured teachers!
At 55, I'll only have 20 years, but I took the 55/25 as a safety valve; don't need to retire, but it's a nice option.
"Life" is always based on escape clauses.
You know who I am.
Can someone explain what 55/25 is?
to 7:25 pm - Age of 55 with 25 years of service
to 11:48 am - the California case (Friedrich case) deals with check off and has nothing to do with your pension. Teacher pension laws can only be changed by act of the legislature. That is why it is important to vote for state legislators who will not make any changes to the laws. I know that it is often annoying at election time to be asked to vote vote for the cheesy candidates backed by the UFT. Hold your nose and vote for them.
Just to make you tier four people envious- I retired tier one as a supervisor a few years ago with a pension of 146,000, which will increase from the new casa contract probably above 150,000.
Hey Chaz, I am a lucky person who will have 30 yrs of service Tier 4 when I am about 52. Can I retire at 52 and then, upon reaching the age of 55, start to receive my 60% pension?
In a previous post, someone commented that they do not consider 60% a monster pension. Are you kidding me? 60% of 120k (top teacher pay) is pretty amazing if you ask me. Look at anyone who is not a civil servant.... medical office manager, staff accountant, anyone in sales, etc... They work a lifetime (30 years) and then have to DEPEND on their savings account for the remaining 25-30 years of their lifetime! However, when we retire....we are paid a salary of over 70K for NOT working. Amazing!! What a great career choice I made.
to 8:50 pm - You can retire and not take the pension - you can leave it with TRS or move it into another fund. Keep in mind that if you keep the money with TRS you do not pay state tax when you start to take the pension. If you move it to another fund, such as Vanguard or Dreyfus, then the pension withdrawals are taxed by NY state on amounts over $20,000.
Just checked my payroll portal and guess what? No retro payment. Called in to uft, they said there's no reason. Waiting to be called back
5:51 - not a teacher. Get your degree and get hired and fired in 5 years top. I got a monster for you, asshole.
Chaz,
I wish you or RBE would do a story on ATR AP's. It's crazy man. Even they are laughing. How bout a post "Name your ATR AP". These people are making 130K doing ZEROOO!!!!! What a country.
DOEvet,
I think you lose your lump sums if you go before 55. Check with a pension rep.
To 3:50,
ATR APs are treated like shit. Most of them are good people and came from closing schools like us.
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