A teacher in the New York City School System is vested , for pension purposes, after five years. However, a teacher must still put in ten years before the city stops deducting 3% of the teacher's salary into the pension system. Further, to get maximum credit for the pension, a teacher needs to work 20 years (you get 2% a year for every year you work once you reach 20 years, otherwise you get only 1.67%). For example a 19-year teacher who retires gets 31.73% of the highest three consecutive year average salary (FAS). While a 20-year teacher would get 40% of the FAS. Of course if you worked to 30 years you would receive a 60% pension. Almost as important, after 10 years the teacher is eligible to retire on disability, which is 33.3% of your FAS and if the disability was in the line of duty, it would be 67% of the FAS. Finally, once a teacher reaches their maximum pay grade (8b), the city contributes $400 per year and this money accumlates at 5% interest. This is called the Annuity Savings Accumulation Fund (ASAF). After 20 years a teacher can expect to have nearly $8,000 in the ASAF and is used to supplement the pension through an annuity.
All of the above were obtained by hard-won union negotiations and protected (pensions & disability) by the New York State constitution that does not allow reductions for existing employees. However, this has not hampered Kleinberg from trying to reduce pension costs in the New York City School System. How are they doing it? Let's see how.
First, the Kleinberg policy of recruiting teachers over the retention of existing teachers. The recruiting of teachers is the top priority of the administration. It doesn't matter that many of the teachers come from alternate certification programs like the Teaching Fellows and Teach For America and that DOE recruits out of the country to fill other positions. Kleinberg gives a bonus, loan forgivness, and rent payments for up to two years. Further, the DOE, for the first time, allowed schools to hire new teachers rather than first hire from the excessed teacher pool. Since 50% of the new teachers quit by their third year that means many of the newbies will never benefit from the pension plan. The unfortunate part of this is my union's aiding and abetting Kleinberg in their recruitment over the retention policy.
Second, the increased work day eliminated many per session jobs, which are pensionable, especially in the elementary schools. By using the 37.5 minutes at the end of the day, many after school programs were eliminated. More importantly, night school was also eliminated. Many of the more senior teachers use night school to increase their pensions. Therefore, by eliminating night schools, they are reducing pension expenses. Further, the lower budgets for many schools mean no paid tutoring programs, which is a per session activity.
Third, many of the ATR's are experienced teachers who were excessed due to the closing down of large schools or from schools that had budget cuts. Since the DOE allowed the small schools to hire the new teachers, they did not have to take many of the teachers excessed from the schools. While these ATR's are protected by the union contract, it is very obvious that Kleinberg will want a time limit for them in the next contract. In other words, if you are an ATR for 18 months then you will be fired. The more ATR's fired, the less the pension cost.
Finally, the Kleinberg policy to privatize the school system, such as Charter Schools means that more teachers will not have union or pension protection thereby, reducing costs to the City.
What's next? Well, there are rumors that summer school will be privatized, meaning reduced pension costs and of course the administration's attempt to fire the ATR's in the next contract.
Regardless, look for the City to propose a new pension tier for the new teacher. Tier V it will be called and however it will be constructed, it will save the City money and reduce the pensions for the new teachers. An inferior pension indeed!