April 8, 2011

Buying Into the Pension System, 'Cause We Can Afford It!

Marc Comtois

"Bill would help Teachers Retire Early" says the ProJo headline to Randall Edgar's piece. Really? How about "Bill Would Increase State Pension Obligation", because that's what it really does.

Looking to expand on an option that is already available to most public school teachers who have worked in private schools, state Sen. Frank A. Ciccone III is sponsoring a bill that would allow teachers who have worked in “for-profit” schools to purchase retirement credit in the state Teachers Retirement System.

If adopted, Senate bill 0145 would allow those teachers to buy up to five years of retirement credit by paying the “full actuarial value of each year” they want to add, just as most teachers with private school experience can do now.

Ciccone, a Providence Democrat, said he sponsored the bill for a constituent, Jane Bernardino, who told the Senate Finance Committee Thursday that it would cost her about $70,000 to $75,000 to buy enough credit to retire, assuming the contributions were based on 20-percent of her current salary.

“I’ve been teaching for 31 years,” she said. “I only have 25 years invested in the retirement system.”

Good deal, pay $70-75k now, retire five years early and get your entire investment back within a couple, three years. Meanwhile, taxpayers get to subsidize your retirement for a couple extra years. It's great that our pension system is in such good shape.

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Teachers are the new aristocracy, for sure.
The rest of us should shut up and bow down to our new overlords.

Posted by: Bob at April 8, 2011 11:53 AM

I'm sure the fine print states she will have to purchase five years of union dues + penalties and interest.

Posted by: dave at April 8, 2011 12:02 PM

I keep calling around to various financial advisors, and I can't find anywhere that I can buy an annuity for $75,000 that pays me anything close to $50,000 a year for life. Why not?

If this is such a great deal, then Ciccione should let anyone buy into the system. As the other labor leader stated a couple of weeks ago, the more people we have buying into the system, the less the shortage the pension obligation will be, right?

So who do I send my $75,000 check to?

Posted by: Patrick at April 8, 2011 12:48 PM

No buying pension credit - if you think we have pension problems now, imagine what we would be looking at if we hadn't cracked on most pension-buying schemes in the '90s?
That said, don't be surprised if charter and for-profit school teachers try to unionize. They're finding out that nobility doesn't pay the bills.

Posted by: bella at April 8, 2011 5:49 PM

"Teachers are the new aristocracy, for sure."

Correction-ALL government "workers" are the new aristocracy.

Posted by: Tommy Cranston at April 8, 2011 6:50 PM

Why don't we let the fireman buy back their prior time as ambulance driver's and the cops for their prior time as security guards. But there's more!!! Let's not forget the public works guys for those failed landscape and construction companies they owned before the cities and towns bailed them out by hiring them.

Posted by: Max Diesel at April 9, 2011 1:42 PM
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