The Truth about a Small Town Teacher's Pension
In today’s challenging economic climate, not a day goes by that an article about “Golden Retirement Packages” for public servants doesn’t appear in a newspaper or on a TV news show. It is the misinformation in many of these articles that compels me to write this letter.
As a newly retired member of the teaching profession in the state of Massachusetts in the town of Holliston, I live within the following plan:
• As a retired Holliston teacher, my pension from the MTRB (Massachusetts Teachers Retirement Board) is funded soley by myself with an 11% contribution from each of my paychecks. This pension is also solely funded by all teachers in the state of Massachusetts who are still working. The taxpayers of the town of Holliston and the state of Massachusetts have not contributed one penny toward our monthly retirement pay. This payment is not taxed by the state of Massachusetts as long as I reside in this state or one of the few states that do not collect any state income tax.
• Any other retirement income (for example:403 B accounts, savings, part time job salaries) that I make does not receive this tax free benefit.
• Teachers in Massachusetts are not permitted to pay into Social Security. Period.
• My share of my health insurance monthly premium with Harvard Pilgrim is $258. The Town of Holliston does pay the other 50% of the monthly premium. This is a “perk” that many in the public feel is too generous. Why aren’t retired teachers put on Medicare? I (and all teachers hired before 1985) were prohibited from contributing to the Medicare portion of social security. It is important to note that if I was eligible to contribute to Medicare, the town of Holliston would have been required to pay 6.2% of my payment into Medicare.
• The town of Holliston’s portion for monthly health insurance premiums for all of its employees (teachers, police, fire fighters) is a negotiated percentage and as such , can be renegotiated during contract negotiations with each group.
• My monthly premium for dental insurance is $45.92. The town of Holliston does not subsidize any dental plans for any of its employees.
I would like the public to understand the facts about their teachers’ retirement situation before they make a decision to change any part of it (especially health insurance) based on erroneous information.
I am proud to have served the students of Holliston as a teacher for over 34 years and do not regret having chosen teaching as my lifelong profession. My husband has also taught and coached in Holliston for over thirty years and will retire this fall. He is part of the Holliston teachers’ union that voted to give back four days worth of pay to the town of Holliston in the form of four work furlough days. This agreement may now cost him a decrease in his monthly pension. Our two sons have graduated from the Holliston School system and gone on to study at top ranked colleges, largely in part to the wonderful teachers they had in the Holliston Public School system. Over the years I have seen that the town of Holliston cares about providing its students with a top notched education largely paid for with taxpayers’ significant real estate taxes.
So here is what I need every taxpayer to understand: I am not getting rich in retirement on any taxpayer’s money. I am paying the same high monthly premiums for health insurance that many of you are paying and I do not have the “safety net” of Medicare to fall back on. I am also paying the same hefty real estate taxes, gas bills, food bills, to which all of you are subjected. I have had to learn to live within my means my entire working life and never thought I’d be a rich retired teacher. What I did think was that taxpayers would value the job I did with their children and honor the labor agreements that their elected officials signed. I do not think that is too much to ask.
iF BOTH HUSBAND AND WIFE HAVE 34 YEARS + IN TEACHING BETWEEN THEM THEIR GROSS INCOME WILL BE CLOSE TO $100,000, THAT IS NOT THAT BAD.
s graham | 2016-09-10 07:39:18
Jim Stergios of the Pioneer Institute has an excellent ongoing series on Boston.com on the teacher pension issue. His latest installment could have been written in direct reaction to Mrs. Boles' post. http://boston.com/community/blogs/rock_the_schoolhouse/2011/03/_last_week_i_blogged.html
Dan Haley | 2011-03-29 09:20:11
First, both Mr. and Mrs. Boles are fine educators, and the kids of Holliston were most fortunate to have them as teachers. However, it is critical that we get the facts straight. In the Massachusetts Teacher's Retirement Plan, there is absolutely no connection between the contributions made by a particular teacher and that teacher's pension benefit. The plan is s defined benefit plan and the pension is determined by pay, age and service at retirement. Unfortunately, some still think that what they pay in is somehow associated with their monthly pension benefit. Contributions by teachers certainly reduce the cost of the plan, but remember, if the amounts contributed by teachers covered the full cost of their pensions, the plan would not be underfunded to the tune of $13.6 BILLION and the State of Massachusetts would not have had to pay Holliston's share of the teachers retirement plan expense for FY 2009 to the tune of $5.6 MILLION. And unless Mrs. Boles was hired after July 1, 2001, she should not have had to pay 11%. The 11% contribution rate began with new hires on and after July 1, 2001. The amount a teacher contributes is based on their date of hire. To reduce the cost of the state's pension plan, the amount contributed be employees has been raised several times over the years. Here's the link to the table. http://www.mass.gov/mtrs/2members/20active/20membership.htm Others have already corrected the confusion between Social Security and Medicare. Teachers do not participate in Social Security so neither they nor the Town pays the 6.2% Social Security tax. However, most Holliston employees do participate in Medicare and both they and the Town pay the 1.45% Medicare tax. I'm not sure what Mrs. Boles' reference is to erroneous information, but if she thinks I have distributed any, I'd be happy to look at it again. And I am not one saying that our teachers get rich on public pensions. The abuses of our public pension plan are now legend. Some have been
Bill Dowd | 2011-03-28 18:56:46
Don't Massachusetts teachers receive a defined benefit pension for life? The author states that her pension is funded solely by her 11% annual contribution. Is that really correct? I thought the pension was funded (or will be funded) primarily from taxpayer dollars. I saw an article from last year that said based on average teacher salaries the average teacher contributes $6,600 per year but gets an average annual benefit of $36,000, which at average retirement age has an annuity value of over $500,000 - far more than the annual contributions would add up to. Can someone clarify? I'm not making a comment on whether it's deserved or not, I'm just trying to get the facts straight.
Mark | 2011-03-28 18:01:40
Clarification to Ms. Boles' excellent 3/26 article: The Town of Holliston contributes 60% toward all health insurance plan costs, except for a PPO plan which is at 50% contribution rate. The medicare rate is 1.45% cost to Town of Holliston and 1.45% cost to employee (all employees hired after 1985 are contributing to Medicare). FICA (The Federal Insurance Contribution Act): The employee contribution to social security is currently 4.2% and employer contributes 6.2% (wage base limit is $106,800).
Anonymous | 2011-03-28 09:05:58
Great article! Thanks for contributing this. I also think it's horrible that they are now going back on previously agreed upon furlough days. Teachers are an asset to our towns- and I wish that they were treated as such!
Karen | 2011-03-28 08:18:29
Thank you for the insight. It's nice to see all the numbers broken down. On a side note, Mrs. Boles was one of the few positive experiences we had with the Middle School. The Elementary and High Schools in Holliston are top notch. The Middle School has some work to do. Enjoyt your well deserved retirement!
John | 2011-03-28 07:34:02
I too would like to thank Ms. Boles for this post, and for her service to Holliston (Mr. Boles was my phys ed teacher for several years way back when). She makes an important point: Many public sector benefit packages are in no sense excessive or exorbitant, and many (MOST in our town, to our good fortune) public sector employees are worth every penny they are paid, and probably more. None of that - and none of the details of the specific situation described above - change the fact that the public pension and benefits system is a mess, rife with abuse, and on the fast track to insolvency. Just as "there are good teachers" is no answer to criticism of union protection of bad teachers, "my pension is not excessive" is no answer to criticism of excessive pensions. In fact, it is exactly people like Ms. Boles who should (in my opinion) be most upset about the excess and corruption in the current system, which threaten not only political support for public workers, but ultimately the contract she mentioned that she has every right to expect will be fulfilled. In the same way, quality teachers ought to be most outraged by union protection of lousy teachers. In political tussles the good teachers (and the public employees who will never get rich off their pensions) end up tarred with the same broad brush as the crappy teachers phoning it in for years, protected by seniority, and the MBTA workers retiring at 50 with a six figure pension and health care for life. Unfortunately, it is impossible to add a qualifying footnote to every criticism and policy argument (and even when they are written, folks like Art tend to skip past them). But again, Ms. Boles point is an important one. The imperative ought to be to fix the system without jeopardizing the benefits of people like Mr. and Mrs. Boles, who have played by the rules and provided a career of service. Unfortunately, by spending most of their efforts protecting people who are in every way the opposite of the Boles
Dan Haley | 2011-03-28 07:27:22
Ms Boles: Thanks for your insightful explanation!! It's unbelievable that the "screamers"(one of whom is a regular in this publication)on the right have chosen public employees and their unions as the scapegoats for our ongoing economic problems. No mention of 2(now 3)wars, the wall street thieves, or the hundreds of millions doled out to out-going CEOs and others in the private sector. Thank you, again!!
art winters | 2011-03-28 04:32:27