Tuesday, March 13, 2018

The Tier VI Teacher Retirement Game Is A Sucker's Game.

The Tier VI retirement game is based upon reasonably conservative assumptions on how difficult it is for a Tier VI teacher to reach their goal of full retirement benefits.

The Tier VI teacher retirement game requires one dice (die) and depends on the law of probability.  Based on the assumptions used for the game, only 9.2% of all Tier VI teachers will be able to reach the goal of full retirement benefits.  That's one out of every 11, not good odds.  The assumptions used in the Tier VI retirement game are as follows:

The first  step is to reach the 10 year vesting period necessary to receive a pension.  Based on the Manhattan Institute report on Fairer Pensions, only 33% of all New York City teachers (Mostly Tier IV) will last long enough in the New York City Public Schools to be vested for a pension.  This is a conservative assumption since the study was done before the New York State Teacher Evaluation System and the use of the Charlotte Dainelson rubric that is used as a weapon against teachers. Other cities report percentages in the teens and that will probably be the value for Tier VI teachers in the future.

Next, for those 33% of Tier VI teachers that are vested, the next goal is obtaining retiree health benefits,  To achieve retiree health benefits the Tier VI teacher must have 15 years in the system,  Since this is only 5 years over the pension vesting period, I assumed that only 17% of Tier VI teachers will not achieve that goal.

To get to the maximum percentage (1.75%) to calculate the 5 year Final Average Salary (FAS), the Tier VI teacher must have a full 20 years in the pension plan.  Otherwise the FAS is calculated using a 1.67% factor rather than the 1.75% factor once they completed their 20 year of service.  According to various studies, only 67% of the teachers (Tiers 1 thru 4) actually reach the 20 year threshold if they had completed 15 years This is true in New York City where veteran teachers are targeted.  Therefore, in the Tier VI retirement game I conservatively used 67% of the Tier VI teachers who reached 15 year of service will last another 5 years to the 20 year goal of maximum percentage when calculating their five year FAS.

Finally, to reach full retirement benefits and a maximum pension, the Tier VI teacher must reach 63 years of age.  Otherwise they are subject to an age reduction factor of as much as 48%!  Only 50% of Tier VI teachers who meet the  above criteria will reach full retirement age.

Is it any wonder that a Tier VI teacher has the odds stacked against them as they strive for full retirement benefits?  If you play the game you only have a 9.2% chance of achieving your goal and that's probably close to what will happen as the Tier VI teacher moves closer to retirement in in the year 2032 and beyond.

The bottom, line is for Tier VI teachers, reaching full retirement is a sucker's game.


Anonymous said...

Things can change for tier Vl members or they can create a new tier and dissolve tier VI There is a looming teacher shortage and to attract people to pursue a career in teaching things will change!

Has there been a time in recent history that a tier was readjusted?

What about tier III? Gone!

Anonymous said...


I love the game. My wife and I played it and both of us lost

chris said...

I’m hearing crazy rumors that the far majority of teachers over 53 yrs old are waiting for their final retro payment in 2020 to retire in spring 2021 . id bet there will be over 10,000 teachers retiring that year . TFA is going to be very busy trying to find people off of the street

Anonymous said...

How odd. In the private sector, they try to offer more, not fewer benefits over time to entice good people to stay. I know this because I was fired from the DOE and successfully reinvented my career and am now thriving in private industry (something I encourage more teachers to do). Many people chose to teach because it was worth the trade off of the lower salary in exchange for retiring 10 years earlier than everyone else. Now that newer teachers have no early retirement option or job security, all that's left is a worthless, low-paying job that nobody wants to do anymore. Good riddance!

Bronx ATR said...

There's no teacher shortage in NYC and never will be. Every hipster in the entire world wants to live in swinging NYC and have the summer off. Every summer 5-8,000 new teachers are hired. All those new teachers pay dues, as well as ATRs. So there's no impetus for the UFT to demand a freeze on hiring until ATRs are placed. Previous tiers are gone and replaced with more inferior ones, not superior.

Anonymous said...

Right on Chaz, for letting young teachers know what to expect. Your work is a great resource.
When one firsts starts teaching, the furthest thing on ones mind is a pension; just trying to pay the bills. One needs to decide early on if it is worth the long haul. I wish I had educated myself earlier in my career about pension, CAR, terminal leave, and especially retirement plans, NYC Differed Comp. and the TDA. I would have had a million dollars now.

Tier 4,5 = if you work 30 years and aged 55 you get full pension (50% of last 3 years average)

Tier 6 = if you work 30 years and aged 55 and you decided to retire at this age (without reaching full pension) pension is only 25% of last 5 years average. Huge difference!

Bottom line for tier 6, if you don't plan on working to age 63, might as well find a more lucrative career. I think a teacher shortage is coming.
Could you imagine what the state of public school education will be when these new teachers retire in the year 2050?

Anonymous said...

I believe that the NYC school system is set up to be a disposable system. It is an a sense a large "Ponzi scheme" where the burden is placed squarely on the population of teachers with less than 10 years of a experience pay for those who will be leaving the system. It has all been calculated by the bean counters at Tweed as to the approximate amount of teachers they want to complete to full pension benefits. As far as the earlier comment; I do not see the DOE changing the rules now that union gave them the keys to the store....

Anonymous said...

I work in one of those Bloomberg schools with almost all Tier VI teachers. I am going yo show them your post and see their collective expressions when they realize the futility of making teaching in NYC a career.

Anonymous said...

5:16 PM (First post in these comments)

Don't count on a purported and purportedly looming teacher shortage.

Tier IV began 35 years ago and the 'adjustment' to it, Tier V, is WORSE for teachers. And Tier VI, worse still. The voting public and pols now have no appetite for improving public sector pensions.

Chaz' conclusion as to negative 'adjustments' of Tier VI and subsequent impact on pensions is common sense. And is precisely the aim of Tier VI.

Anonymous said...


The tier vi teacher won’t care. They are 25 or younger and have been taught that unions are the reason schools are failing.

The millennial new teacher does not believe in discipline. They believe in counseling. They don’t want to believe that crap gives birth to crap.

They also aren’t concerned about a long career.

This is what de blass hole wants. Migrant workers. He wants the Uft gone.

In 20 years I wouldn’t be surprised if teachers were paid on a 1099

Chaz said...
This comment has been removed by the author.
Anonymous said...

Newbies should wait to join tier VI until they are 40-43 years old. That way they can be less burned out by retirement...

Anonymous said...

Those who say there will be no teaching shortage are correct, but for NYC only. One poster mentioned every hipster wants to move here. It is true and that is why we have less bargaining power in NYC.

Other parts of the state and nation do have shortages and it will get worse. For NYC math, science, special ed and bilingual will be the big safety areas of growth as our students get dumber, more non-English speaking and/or special needs.

Chaz is spot on - Tier 6 is awful, but the young, as a poster pointed out, don't care right now. It is hard for people to see ahead 10-30 years.

I am Tier 4 with 11 years in. I plan on early retirement at 55 or so. My pension will not be more than a 20 year pension, but who cares?

Anonymous said...


There is no teacher shortage and there never will be.

Each year, 8000-10000 new teachers are hired.

They don’t know, understand or what to know about unions, pensions , working conditions etc.

The doe knows this.

So, as long as colleges get enrollment and the Uft gets dues and teachers quit each year, the doe, colleges and Uft are happy

Remember, this is no longer a career. It’s year to year survival.

Anonymous said...

in state tuition now free in Tennessee for undocumented immigrants. Politicians passed law with publics money to pay...wow

Anonymous said...

Anon 9:51, tier 4 gets 60% FAS, after 30/55. Don't think tier 5 is as good..

Anonymous said...

I started teaching in NYC in the 90’s and yes, there was a teacher shortage back then. DOE was recruiting teachers from the Caribbean. They were practically begging folks to come work here. The irony is back then we had a strong union and contract and even admins had our backs. If the economy continues to stay strong and the DOE continues to abuse teachers, nobody is going to want to reach here. There already is a partial teacher shortage in the Bronx. Lastly, enrollment in teacher preparation colleges is down in a big way. A new teacher shortage can and will happen again.

Anonymous said...


I showed your game to the other teachers and the veteran teachers could only laugh while the Tier VI teachers frowned and claimed it is not true.

Anonymous said...

Yes, some Bronx schools are hard to staff, but only because the students are so awful there that even the most dedicated social justice warrior teachers get worn down pretty fast.

A few I knew in my time there even turned race realist and conservative. It was amazing to see their theories crash and burn. NYC is now something like 75% black, latino and Asian. When we are finally gone, they will be at each other's throats. There is already something of a cold war between those three groups. I see it every day in the school I'm at.

Anonymous said...

I don't know who is going to be left to teach, but I do know that the Tier 4 teachers have had enough. Pretty much everyone that has 20 plus years can't wait to go. I thank my lucky stars that I took the 25/55 deal and only have a few more to go. This was once a much better job, but there is only so much one can take from the system, administrators, danielson, motps, mosls, longer school day, apprs, walk throughs,loss of permanent license, threats of school closure, etc,,you get the idea. The new teachers are totally screwed.

Anonymous said...

8:00 has it right. I only have 11 and I've had it. The change to Danielson was the nail in the coffin. So many of us are really good teachers and help the students so much in spite of all the innumerable challenges.

Now with Danielson's nightmare they make us feel they want to fire us at any moment. Add in administrators who think they are dictators and you have a toxic environment both within and without the class. Who can work like that?

Highly Effective King Clovis said...

I'm Tier IV and this is my 11th year. So when I get to 15 I get Retirement Benefits? I am Vested, got the letter to prove it, somewhere.

Anonymous said...

You do know who will be left. Teaching fellows, teach for America or per diem subs.

The doe wants a warm body. The aptitude does not matter

Anonymous said...

After 16 awful years of hell teaching in the Bronx, I was finally pushed out in 2016, and had to reinvent myself in the private sector. I still have PTSD from the psychopath administration, Danielson, informals, motp, mosl, differentiated instruction, grouping, testing, unit plans, bulletin boards, disruptive students, ruined Sundays writing lesson plans, useless extended days, appr, walk through, clip boards, time cards, letters to file, rebuttal letters, useless UFT, vehicle vandalism, finding parking, Throgs Neck Bridge tolls, dirty school building, “Yo, Mista!” every 5 minutes, etc. The favorites of the administration can hide and get away with doing little other than walk around the building yelling “get to class!” while this 50+ white male from Long Island was under constant attack from this racist, white men hating corrupt system. Chaz, what type of tier IV pension can I expect at age 62 with 16 years service credit, Masters +30?

Anonymous said...

Mulgrew and the Union has sold out the most experienced teachers, but our students are paying the consequences.

Anonymous said...

I too was pushed out and reinvented myself in the private sector. It was the greatest blessing I could have ever received. I now make a lot more than my teaching salary and am treated with dignity and respect every day. I encourage all teachers to do this. It's not worth staying around being miserable just to get a pension which isn't that much even if you do make it all the way to full retirement age!

A lot of teachers become "institutionalized", in that they convince themselves that nobody will hire them for any good job outside the DOE. THIS IS PATENTLY FALSE. Teachers have A LOT of skills that are transferable to private industry. It's purely a matter of switching your perspective from public service to profit. My corporate job is a cakewalk compared to the DOE nightmare, and with my next promotion I will make over $200k. The DOE has such a horrendous reputation that nobody in the corporate world could care less if you were fired, in the rubber room, etc. The bottom line is this - YOU determine the course of your own future, NOT your principal or the DOE. Go out there and show the world what you can really do!

Anonymous said...

Hate to tell you, but you are not going to get much with just 16 years in. You will get access to cheap medical coverage. However, you need 20 years to get 40% pension. You would have needed 25 years to get 50%.

Anonymous said...

To 10:20 - I feel your pain! I only did two years in the Bronx and it gave me my first grey hair (prematurely) but the stress was something I never experienced in my life before.

I actually learned to live with the craziness of the student body and took an introspective live-and-let-live approach with them. It was only the admins that gave me real stress and psychological torture. Their basic attitude was: "We know everything, you suck and we are looking to fire you at any and every moment."

I have a long working history across many fields and never had a work environment like this. I transferred to Queens and the same pattern has repeated itself. I am on my third administration at the Queens school I currently work in, and 2 out of the 3 admin cohorts have been just like what I experienced in the Bronx.

Minimum 6 years to go to retire early at 55 with 18 years in. I want to try to last until I get a 20 year pension, but it will be tough. I read that tenure is useless now as Danielson's rubric can get you canned with just one year as ineffective. (I know it was two before, but now people are saying one can get you, and 2 years developing now can too.)

I have not gotten less than effective since it came into use, but the admins are not trustworthy and can sink you if they so choose, regardless of what you do. I know the admins here. If they like you, they circle higher on the rubric. If they don't, they circle lower. I have seen it happen to others who fell out of favor.

I'm too old to reinvent myself now and need to last half a decade at least. The Tier 6 and beyond people will have it worse than us though.

Anonymous said...

Thank you so much for putting a spotlight on Tier 6!!! You are the only one who has provided us with the information we need!

Really can't thank you enough!

Anonymous said...

Finny but true. Few Tier VI teachers will make it to full retirement age.

Anonymous said...

This clarifies things for the new Tier VI-ers. It is overwhelmingly unlikely they will have a full teaching career. They should start planning from the beginning to make teaching a temporary stop - that is the reality.

Anonymous said...

Tier 6 is a blessing.

As someone who was on Tier VI, and just by a hair not meeting the cutoff for a better Tier, I can't imagine anyone ever collecting. I certainly think the destruction of the pension system for teachers is already baked in; I would have chosen a 401k/403b/457 plan and any small match over this terrible "benefit."

I used my time as a teacher to finish my paid-for education and shop for a better job and in January 2017 was offered a position for 50% over my teacher salary. The principal and superintendent(housed in my school) both told me I couldn't leave and I would never work in a school again. This was funny, as three other teachers had already quit during that same school year. I then became quite sick, was forced to use all my sick days...oh no.

I immediately filled out the withdrawal form in February and rolled over my contributions to an IRA. Those contributions I made grew by 30%+ since I put them in. That money alone is worth nearly 100k! I happen to be in my 30's. Even with nominal interest(7%) by the time I get to 63 in 30 years I will have 800k! That's with NO FURTHER CONTRIBUTIONS!

Just a note, I left my TDA contributions in there for now. I found you can leave that money in there for up to 7 years until you're forced to take it out. I could have left my Tier 6 retirement cont. in too for 7 years, but I thought I could do better than the 5% interest they give you-and did.

Please listen, get out of teaching! Once you leave you realize how horrible it was. I walk past a school everyday on the way to the bus and say thank God I don't have to go into that hellhole!

There are so many jobs that are open, and they all pay comparable salaries or better ones than teaching, with little stress. You also don't need a specific degree for many. My HR department hires anyone with a bachelors and a pulse. Most starting jobs in HR only pay 60-80k, but again, no stress. Assistant positions/secretaries also start over 50k where I work and almost any teacher would qualify.

I wish I could talk to every teacher and tell them how much better it is outside teaching. The hours are not longer either, 8-4 or 9-5, but you bring nothing home. Days longer? Most Fridays are 1/2 days in summer, you get weeks of paid vacation, and if you're sick you stay home and lose nothing! Mind you, I was sick all the time teaching, colds, the flu, strep-throat, stomach bugs, etc. and haven't gotten sick once since. I think it's partly that the stress is gone and certainly the fact that diseased children aren't around me!

I can't understand anything about teaching anymore. Why was the administration always attacking us? We didn't make much and no one was line up for the job. Why do the kids and parents get to abuse you? Why do children get to run around crazy? How many crimes, drugs, sexual assaults, etc. can a school cover up every month?

Get out of teaching, don't believe the naysayers, you don't get more time off teaching, you don't get good pay, Tier VI is not as good in anyway to contributing to a 401k, and you will be far happier with your life outside teaching. I once thought teaching was my calling, helping children, but all I did was get abused and babysit.

Anonymous said...

To 8:27
Then we will be puppeteered to do exactly what the Bill Gates' of the world orchestrated and planned . To create a temporary teaching work force that leaves within 5 years and accrues ZERO benefits.

Anonymous said...

Lucky enough to be tier 4.... I would always talk up having a good retirement plan. Now I just don't want to be the guy to break it to them now that the majority are tier 6 around the building

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Anonymous said...

Hey, I have a question and I'm getting the run around on the vesting for health benefits for a tier 6 which I am and would leave after 10 yrs and 55 if it's 10 years. I can't find anything documented other than this post. Contact to doehrconnect takes me to this..Continuing Health Benefit Coverage into Retirement

You may be eligible to continue your Health Benefits into Retirement if you have the minimum years of credited service as a member of a Retirement or Pension System maintained by the City. The minimum for employees who were employed by the City on or before December 27, 2001 is five (5) years. The minimum for employees who were employed by the City after December 27, 2001 is ten (10) years.

Could you please be so kind to share where you see the 15 year vesting for health benefits documented. What did the UFT get for this significant give back in 2012? Thank you I appreciate your site.

Chaz said...

Anon 9:10 ppm

Read my October 2015 blog here.


WNY teacher said...

Chaz, you overlooked one very negative thing about tier vi... tier vi has to pay into their retirement for their whole career... and the more you make, the higher the % you pay! If a tier vi teacher ever makes it close to retirement and has a salary of $100,000+ then they will have to contribute 6% a year towards their retirement! With teacher pay not really keeping up with cost of living, tier vi teachers will be taking home less then teachers 20 years prior!

I tell all new teachers this so they can make an informed decision about their future...(I'm tier iv with 7.5 years till full retirement)