Push for pension reform rocks teachers

02/03/2021

Teachers are upset at the Marin County Board of Education for discussing pension reform in the middle of a pandemic without any feedback from labor unions. The county board considered a resolution last month that calls on state legislators to enact pension reform, proposing several possible solutions—including weakening pensions by reducing benefits and raising the retirement age. Teachers spoke out against the nonbinding resolution, which was tabled in response to their concerns.

“We are already struggling so much, so to throw this monkey wrench in is really unfair,” said Anita Collison, president of the Lagunitas School District’s teachers’ union.

Morgan Agnew, the San Rafael teachers’ union president, said pension reform is “an important discussion that needs to happen, absolutely. But we’re not happy about solutions being discussed without our input.”

The latest move to address pension reform was made by the Pension Ad Hoc Committee, a group of school board members and superintendents from the countywide Efficiency and Effectiveness Collaborative. Terena Mares, the deputy county superintendent of schools and a member of the ad hoc committee, said the resolution was meant to get the attention of state legislators. Labor unions were going to be consulted later on.

“The objective of the resolution was to call attention to the problem; it wasn’t to solve the problem. If we were trying to solve the problem, at that point we would’ve reached out to labor,” Ms. Mares said. “Maybe it could’ve been done differently.”

Adding to the offense, Mary Jane Burke, the superintendent of the Marin County Office of Education, tweeted an opinion article with the headline, “To help get kids back in school, California should temporarily suspend local collective bargaining.” 

Ms. Burke told the Light that her intention was not to disparage unions but rather to share a creative solution that is not needed in Marin, where 101 of 116 schools are considered open, but could be useful where reopening efforts are stalled. The article she posted was written by Carl Cohn, usually an advocate for local control who made the case for Governor Gavin Newsom to use his emergency authority to negotiate a statewide reopening, instead of leaving hundreds of districts to work with their local unions on individual reopening plans.

“In unprecedented times, we need to consider any and all options to figure out how to support teachers, classified staff and students to get back into class in person,” Ms. Burke said. 

But her tweet, sent two days after the ad hoc committee’s discussion of pension reform, was not well-received. “This year, when teaching is the hardest it has ever been, it’s a slap in the face,” said Julie Cassell, the president of the teachers’ union at the Shoreline Unified School District. “That is a slap in the face from the county to be talking about [how] unions are the problem and that now is when we should be talking about pension reform.”

The discussion around pension reform has been underway for decades in California. Actuaries project billions of dollars in unfunded liabilities in the coming decades. Districts are on the hook for higher contributions, and it’s taking away money from direct education programs.

In California, teachers, principals and superintendents are eligible for a pension—based on the length of their tenure, their retirement age and their highest compensation—from the California State Teachers’ Retirement System, or CalSTRS. Members of CalSTRS do not pay into or receive social security. Other employees, such as secretaries, bus drivers and classroom aides, belong to the California Public Employees’ Retirement System, or CalPERS . 

Both CalSTRS and CalPERS are funded by three parties: employees, school districts and the state. Contributions are invested with an expected annual return of 7 percent. The state legislature determines the level of payments to CalSTRS, while the CalPERS board decides how to split its funding sources. 

School districts and employees have no say in how much they pay. At Shoreline, about 10 percent of the general fund is paid to retirement funds. 

The required contribution from districts has steadily risen following the passage of A.B. 1469, which was intended to fully fund CalSTRS. When the bill passed in 2014, the state required districts to pay 8.88 percent of their payroll to the teachers’ retirement system. This year, they are required to pay 16.15 percent. Mandated CalPERS contributions have risen from 11.77 to 20.7 percent of payroll costs in the same timeframe, leaving less money within districts for direct education costs. 

The rising liability caught the eye of the Joint Legislative Advisory Committee, a countywide group of elected school board members and superintendents created to advocate on behalf of public education in Marin. Pension reform has been a priority for the committee since 2014, and it’s been the number-one goal since 2017. 

The county’s Pension Ad Hoc Committee took on the issue last year after noticing that districts were getting slammed by constituents for cutting budgets, while the overbearing pension costs that forced tough decisions were out of local control. The committee wrote an editorial and drafted a resolution, which can be considered by any school district that supports it, as well as by the Marin County Office of Education.

The resolution calls for action from state lawmakers to institute pension reform and, in the meantime, to increase state funding to offset district costs. Gov. Newsom approved one-time infusions in the past two years, and he has proposed another $9.5 billion in next year’s budget.

The dismay felt by teachers in Marin stems from some of the resolution’s possible solutions. The proposed reforms are pulled from former Governor Jerry Brown’s 12-point pension plan, which was issued in 2011 but was never fulfilled. The plan suggests reducing pension benefit accruals, freezing or reducing cost-of-living adjustments if the economy experiences deflation, raising the age of eligibility from 60 to 62 and increasing the required payments from active workers.

Going beyond the 12-point plan, the resolution also proposes changing the benefit structure for new hires and capping pensions for employees receiving over $100,000 a year. These retirees account for just 4 percent of beneficiaries and 16 percent of total pension costs. 

“The problem is very multidimensional, so consequently the solution will need to be multidimensional,” Ms. Mares said. 

Looking forward, the county’s Pension Ad Hoc Committee  will continue to meet monthly to discuss pension reform and it will include labor unions in further conversations.