Op/Ed

Letter to the editor: Retirement fund now vulnerable

I am a teacher at Middlebury Union Middle School (MUMS), where I have been teaching math since 1997. I am writing on behalf of the teachers of the Addison County School District (ACSD). My intention is to raise awareness on an issue that is causing great distress for teachers in my district and across the state: the shocking and promise-breaking attack on the teachers’ retirement system by Vermont State leadership.
I would like to begin by thanking the community for their support not only during the challenges of this past year, but also throughout my time in the district. That support may be stated prominently now more than ever, but truth be told, it has always been there. We as teachers, feel that support on the personal, local level from the people of the greater ACSD community, and are grateful for it.
We do not feel that support from those in power, not right now.
Teachers do not choose the profession for the money. We do, however, take into account the promise of financial security after our careers are over when we decide on teaching as our line of work. Due to a confluence of events — which include 17 years (1990-2007) of underfunding by the state, new accounting requirements, investment returns, and changes in the workforce demographics — we are in danger of losing the financial security that we have been promised.
The factors above have led to funding issues in the retirement system. The State Treasurer, Beth Pearce, is proposing the following changes to our retirement system, which the Legislature will take up in the coming weeks and months:
•  Eliminate cost of living adjustments for active teachers. In other words, when active teachers retire, their benefit will not increase along with inflation. If you are lucky enough to live to 85, you will receive not a penny more than you received when you were 65.
•  Change the Average Final Compensation calculation from a teacher’s highest three years of salary to seven years. In other words, it will lessen the amount of average salary upon which the benefit is calculated, thus lowering the overall amount of the pension each teacher will receive.
•  Increase teachers’ contribution rate to 8% of their salary. Right now, teachers pay either 5% or 6% percent of their salary, depending on when they were hired.
The bottom line is that we are being asked to give more and get less to pay for the projected funding shortfalls. Funding shortfalls that teachers have never caused — because we have always paid every penny asked or required.
Not only have we paid every penny, teachers have already compromised and paid a price for the consequences caused by the years of underfunding. In 2010, in a good faith effort to solve the problem, we agreed to increase our contribution — from 3.5% to the current 5% or 6% — and increase the number of years we needed to work in order to earn full retirement benefits. In fact, Beth Pearce has praised teachers for “stepping up to the plate” and for the work we have done to help resolve the issue. In response to our compromise, the state also agreed to fully fund its share of the pension system moving forward and not short-change the system, as it had in the past. That plan would make the fund solvent by the year 2038.
Now the state is stepping back from the plate, and asking for more. Recent actuarial studies make assumptions that indicate to the Treasurer that these compromises and adjustments may not be enough to sustain the fund until that time, so they want to “negotiate.” We certainly don’t feel good about finding a new “compromise.” How many years until we are asked to unilaterally give again?
We stand in opposition to the Treasurer’s proposal, and urge the legislature to seek alternative solutions to address the pension’s funding issues, rather than place the burden on the backs of the teachers. Teachers have always fully funded our portion of the system. We have never short-changed the system as the state did for 17 years. Considering that teachers’ contributions makeup over 80% of the annual cost to fund the pension system (VSTRS 2019 Actuarial Valuation, page 25), asking the state to honor its obligations seems fair. Our current contributions also are more than fair. No one is getting rich here: Please bear in mind that the average teacher pension is $21,000. The poverty level for a household of four in 2021 is an annual income of $26,500.
The proposed changes to the pension system strip away the financial security that teachers have earned, have always paid their share into, and have been promised. We ask for our Vermont Legislators to stand with their teachers and find a fair solution to this problem.
Paul Cherrier
Middlebury

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