- The Progressive Pulse - http://pulse.ncpolicywatch.org -

Is the Senate’s teacher pay plan a clever way to keep teachers from retiring with pensions?

Posted By Lindsay Wagner On June 6, 2014 @ 12:44 pm In Uncategorized | Comments Disabled

North Carolina educator and blogger James Hogan has an interesting take on the Senate’s proposed 21-step salary schedule [1] for teachers, which would raise average salaries by 11.2 percent next year, provided that teachers relinquish their tenure.

Hogan wonders: is the salary schedule [2], which provides teachers with no raises between years 20-29, cleverly designed to disincentivize teachers from retiring from the profession, with their pensions, by denying them a raise for a decade?

Teachers earn the same $50,000 wage from years 20-29. That’s a decade of service without a pay raise. In year 30, teachers earn just $42 more. Then, wages rise again, topping out at $56,129 at 36 years of service.

That means 16 years of teaching service–almost half the pay chart–is rewarded with only a cumulative 12 percent salary increase. The same working span, when measured from a teacher’s fourth through twentieth year of service, sees a cumulative salary increase of 47 percent.

So the plan clearly benefits teachers in the middle of the pack. And it provides a clear disincentive for teachers who seek to retire from teaching by denying them a raise for a decade. Why would the Senate structure salaries like that?

This is where the decision to give up career status becomes very important. Make no mistake–the Senate pay scale rewards young teachers and pushes older teachers out in the last third of their career.

And why would the state government be interested in teachers leaving the classroom in their last ten years of teaching? The answer, I’m afraid, rests in some of what Senator David Curtis [3] said in his now-infamous response to Charlotte teacher Sarah Wiles [who wrote a letter to legislators  [4]complaining about teachers' pay in the state]:

“You expect a defined contribution retirement plan that will guarantee you about $35,000 per year for life after working 30 years even if you live to be 104 years old. Your employer will need to put about $16,000 per year into your retirement plan each year combined with your $2,000 contribution for the next 30 years to achieve this benefit.”

What he’s saying is the state retirement pension program is the last golden egg for teachers. Here’s why. Say you’re a teacher who began your career the year after college at age 22. You taught for thirty-three years in North Carolina and retired at age 55. Based on today’s standards, you’re set to earn about $28,000 per year in retirement income every year until you die.

If you live another 33 years and die at age 88, that means you stand to collect $924,000 in retirement income. And the reason Senator Curtis was so ardent in pointing out the pension system to Ms. Wiles is that pensions cost the state a lot of money, and my guess is the fiscal conservatives in Raleigh are interesting in doing whatever they can to change that.

It’s an interesting theory. Read Hogan’s full piece over at The Washington Post [1].


Article printed from The Progressive Pulse: http://pulse.ncpolicywatch.org

URL to article: http://pulse.ncpolicywatch.org/2014/06/06/is-the-senates-teacher-pay-plan-a-clever-way-to-keep-teachers-from-retiring-with-pensions/

URLs in this post:

[1] an interesting take on the Senate’s proposed 21-step salary schedule: http://www.washingtonpost.com/blogs/answer-sheet/wp/2014/06/05/a-clever-way-to-get-rid-of-teachers/

[2] salary schedule: http://philberger.com/Education-Press-Conference_05-28-2014-Final.pdf

[3] Senator David Curtis: http://www.forum.jamesdhogan.com/search/label/david%20curtis

[4] who wrote a letter to legislators : http://www.washingtonpost.com/blogs/answer-sheet/wp/2014/05/23/firestorm-erupts-over-teachers-angry-e-mail-to-legislators-about-low-pay/

[5] The quick and dirty on Gov. McCrory’s teacher pay plan : http://pulse.ncpolicywatch.org/2014/05/07/the-quick-and-dirty-on-gov-mccrorys-teacher-pay-plan/

[6] DPI publishes 2014 teacher salary schedule; confusion over longevity pay lingers : http://pulse.ncpolicywatch.org/2014/08/07/dpi-publishes-2014-teacher-salary-schedule-confusion-over-longevity-pay-lingers/

[7] Check out Sen. David Curtis’ harsh email to frustrated NC teacher : http://pulse.ncpolicywatch.org/2014/05/13/check-out-sen-david-curtis-harsh-email-to-frustrated-nc-teacher/

[8] McCrory announces plan to give 450 teachers $10,000 bonuses with Race to the Top funds : http://pulse.ncpolicywatch.org/2014/03/24/mccrory-announces-plan-to-give-450-teachers-10000-bonuses-with-race-to-the-top-funds/

[9] On the eve of the session, Gov. McCrory pushes his career pathway plan for teachers : http://pulse.ncpolicywatch.org/2014/05/13/on-the-eve-of-the-session-gov-mccrory-pushes-his-career-pathway-plan-for-teachers/

Copyright © 2014 The Progressive Pulse. All rights reserved.