There is no question that for New York City teachers who can last in the increasingly hostile classroom, there lies a pot of gold by receiving a nice pension when they leave teaching. Add that to the TDA and Social Security and teachers are set when they retire. This is the Holy Grail that long-term teachers strive for. These teachers gave up competitive salaries with other professions, suffer from constant disrespect from politicians, media, and the students, knowing that if they can just survive these indignities, it will be well worth it. This has been true as New York State has slowly reduced teacher pensions starting from Tier I to Tier VI.
During the time period when all teachers were covered under Tier 1 to Tier IV, pension plans only 40% of the teachers actually lasted till vesting (5-10years) and 33% made it to full retirement age (55 or 62). That means that the majority of teachers did not work long enough to get even a minimal pension. However, for those teachers who managed to make it long enough to be vested, they had a good chance to make it to full retirement age.
Fast forward twenty years from now and the vast majority of teachers will be Tier VI and be subject to the vastly reduced benefits that go with it. For example, they have a 10 year vesting requirement and 15 years to receive retiree health benefits. Moreover, the full retirement age is 63 compared to the 55-62 for the other Tiers (I to IV). Finally, the pension amount is reduced, both by age and by the percentage used to calculate the pension (1.75%) compared to Tier IV (2.0%). See why the City wants to remove veteran Tier IV teachers.
While I cannot accurately predict how many Tier VI teachers will be vested and reach full retirement age. I can venture an educated guess by looking at teacher retention statistics in other major urban areas.
City Teachers Making It To Retirement Age
New York City.....................................33%
Las Vegas..........................................20%
Philadelphia........................................7%
Los Angeles........................................6%
Honolulu.............................................5%
Washington D.C. .................................4%
Chicago..............................................4%
Houston..............................................3%
Miami.................................................1%
Tampa................................................1%
If you add the increased difficulty in achieving tenure, the use of the Charlotte Danielson rubric, the rise of the Leadership Academy Principal, the punitive teacher evaluation system, and the lack of collaboration, Tier VI teachers who reach full retirement age will probably be in the single digits and not the 33% cited in the report.
The bottom line is being a New York City teacher under Tier VI one shouldn't expect to last long enough to be vested and reach their full retirement age. Start thinking of opening an IRA and when you leave the DOE and if your not vested, take the money you contributed to the pension plan should be added to the IRA since their is no teacher pension awaiting you.
20 comments:
A former co-worker of mine entered the system late in the game. She spent the last few years of her career playing catch-up with her TDA, and finally retired at 60, with a penalty, of course.
She died last weekend after being retired for only three years. There is no way in hell that I will work 6 more years in an increasingly hostile environment. This job is sucking the life out of me, and I'm not going to let it. These Tier VI people better have a back up plan.
It's all about survival. Welcome to Survivor, DOE Edition. Can't believe Hollywood hadn't considered a reality series based on this setting.
It's lousy that the person died after only being retired for 3 years. I hope this person got all the retro that he or she was entitled to. If not the City gains. That's why we have the lousy contract that we have. How many years will pass before Tier VII is created. With that one TRS members will probably have to pay half their health insurance. I really wonder how many Tier VI members will work long enough to be vested. Not too many young teachers will stay teaching for ten years without getting married or finding a better teaching job in another state. The City is counting on this. The longer it takes to be vested the less pensions the City will have to pay. Don't Tier VI members have to pay more money also? Don't they have to pay 5% out of each check? The City benefits all the way. Get teachers to resign before they are vested and also if you resign you don't get any retro money. It's a win win situation for the City.
It's lousy that the person died after only being retired for 3 years. I hope this person got all the retro that he or she was entitled to. If not the City gains. That's why we have the lousy contract that we have. How many years will pass before Tier VII is created. With that one TRS members will probably have to pay half their health insurance. I really wonder how many Tier VI members will work long enough to be vested. Not too many young teachers will stay teaching for ten years without getting married or finding a better teaching job in another state. The City is counting on this. The longer it takes to be vested the less pensions the City will have to pay. Don't Tier VI members have to pay more money also? Don't they have to pay 5% out of each check? The City benefits all the way. Get teachers to resign before they are vested and also if you resign you don't get any retro money. It's a win win situation for the City.
It's lousy that the person died after only being retired for 3 years. I hope this person got all the retro that he or she was entitled to. If not the City gains. That's why we have the lousy contract that we have. How many years will pass before Tier VII is created. With that one TRS members will probably have to pay half their health insurance. I really wonder how many Tier VI members will work long enough to be vested. Not too many young teachers will stay teaching for ten years without getting married or finding a better teaching job in another state. The City is counting on this. The longer it takes to be vested the less pensions the City will have to pay. Don't Tier VI members have to pay more money also? Don't they have to pay 5% out of each check? The City benefits all the way. Get teachers to resign before they are vested and also if you resign you don't get any retro money. It's a win win situation for the City.
Question Chaz
I left at the end of my fourth year. I want to keep the money in my TDA for the next 7 years since I am able to do that, then eventually role it into an IRA. However what happened to the money that was going to my TRS (retirement) that I'll never get? I thought that that money was lost since I left before vestige period.
I think that one who is brand new to teaching is better off in a private or charter for the reasons that you mentioned Chaz.
It's just amazing innocent teachers have to come into work this week and be miserable and scared of the constant harassment and intimidation for no reason other than to make teachers feel useless. This all the revolving door model. No more pesnions. The admins know these teachers don't deserve this treatment, but continue to harass as per the DOE directive. Tier 6 ppl are in for a rude awakening. They are sheep and they don't even know it...so sad!
Chaz, your TDA and Pension are still collecting interest for up to 7 school years after separation from the DOE even if you leave before vestige.
Anon 2:14
Only your TDA collects interest. Your pension is an annuity and is set for life, except for a COLA adjustment.
Anon 6:56
You get your contribution back plus 5% interest.
Chaz, from your experience, do most teachers who are/were in tier IV who got vested make it to 55 for their pension? Is the vesting age kind of like the hypothetical "bridge" that needs to get crossed to make it? Just curious.
I just got my ten years vesting. Hooray! Now I will have health benefits when I am old. I hope to go until 55, which is only eight years away. In this climate of Danielson's, however, we are all targets no matter how great a job we do. I have seen this awful 'rubric' used to just destroy people. So sad.
Anyway, the new teachers actually think they will get a great retirement plan under Tier 6. I hate to bust their bubble. Most last only about three years before getting canned or forced to move to another school to save their jobs. Why would anyone go into teaching nowadays?
Anon 6:15About 33% reach their full retirement age
Chaz Can you explain people who signed up for 55/25 that are tier 4 again ? I did it and want to know what would happen if I retired at 21 years? What's the penalty ?
I like the NYC TRS Website - search under tools- because at least it will give you a ballpark monthly pension figure. Also, it also automatically factors in the penalty for those of us who fantasize amount just walking out and never coming back. Also another ballpark is
100 x (x amount of years before 20). For example, I have 14 years. My estimated monthly is around 1400 if I left right now. Factor in social security at 62, that is about 2800 a month. Then there is the TDA, 5 years at max contrib= 100,000, next 100,000 at 4 yrs, then 3 years for a total of 300,000 @ 7% interest - 21,000 in interest w/o touching principal. Of course, that will be subjected to federal tax - just say I take the 21000 a year and that is taxed at a 40% rate - still will walk with about 1000 a month. so if I left today and got any other type of job, I could retire and bring home 3800 a month w/ health benefits at 62. This is how I stay sane. I tell myself I already won. And every day I stay I make more money and one day we will all be free. The price is our sanity and overall health. We have to stay healthy and support each other. Everyone should pick full period observation and 3 drive bys keep these bitches busy!!!
Cris
Sorry it took so long to get back to you but I missed reading your comments. The problem is that 25/55 means just that. You must have 25 years and be at least 55 years old to get a 50% pension.
If you stop at 21 years and reach 55 years of age you would get a 30.7% pension. Quite a reduction see my post attached.
http://chaz11.blogspot.com/2014/12/a-simple-chart-to-determine-your-tier-4.html
NYC Teachers can contribute to both TDA and deferred comp up to a maximum of 34% of salary. Over age 50 this increases to 40%. Teachers can annuitize part of their deferred savings to offset the early retirement penalty
Chaz, as a Tier 6 member, would I be eligible for full pension at age 63 if I retire at 55 with 32 years of service without exercising the early pension option, and wait to start collecting my pension at age 63? Or, would I still get an early retirement penalty-even if I waited to start collecting at age 63?
You can retire at 55 and wait to 63 to get your full retirement pension. Good luck lasting till then.
Could you do a little piece on breaks in service and or leaving before 25/55?
So with the latest Devos appointment, I really don't think I am going to last and I really want out. I have 14 years.
My calculations lead me to believe that if I left today, I would receive around 1300 a month for life starting at 55 and I would have access to health benefits.
But here are my questions:
Who do I call at 55 to get benefits?
Should I get a pension consultation before I resign?
Do I need to fill out any paperwork to make sure I get my benefits?
I heard there is a right of return for 5 years? How does that work?
Also, if I sub, can I get pension credit?
Where can I get this info? TRS? DOE? UFT?
If you could answer any of these questions or provide any resources, I would be so grateful.
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