PAGE Professional Association of Georgia Educators

Opposition Builds to Plan to Change Teachers’ Pensions

By James Salzer
The Atlanta Journal-Constitution
Published Monday, October 20, 2008

Former educators say a plan by Gov. Sonny Perdue’s administration to eliminate annual automatic cost-of-living increases in their pensions is a slap at teachers who spent decades paying into the retirement system.

They also say it will have the biggest impact on teachers who retired 20, 30 years ago and are already receiving relatively low payouts.

In trying to end the automatic increases, administration officials are taking on some of the same politically active folks who helped bring down Perdue’s predecessor, Roy Barnes, in 2002.

At stake are two 1.5 percent cost-of-living increases retired educators receive each year from the state Teacher Retirement System. The Perdue administration wants to have the retirement system board vote on pension increases each year, rather than have them go into effect automatically, as they have since 1969.

The system — funded by educator and employer contributions and investment income — pays pensions to about 78,000 retired teachers, professors and other school employees. Another 300,000 educators and former teachers who are not yet retired are eligible for pensions.

Melvin Johnson, 77, a retired teacher and school administrator from Colbert near Athens, said the increases shouldn’t be optional.

He said educators who retired decades ago will be the hardest hit if the cost-of-living increases are eliminated because teachers never made a lot of money when they were working.

The pension is based on an educators’ highest salaries and the number of years they worked. Salaries were much lower in the 1970s and 1980s than they are today, and Johnson said many retirees get fairly small pensions.

Johnson said eliminating the increases would mean the loss of about $500 a year for him.

“People are just afraid,” he said. “I don’t know what I would do if I lost some of my teacher retirement [pension].”

Bert Brantley, the governor’s spokesman, said the proposed change would allow the board to better manage the retirement fund. The boards of other state retirement systems vote on cost-of-living increases, he said.

The state has a big financial stake in the Teacher Retirement System. During fiscal 2008, which ended June 30, the state contributed more than $500 million to the fund. The TRS fund had $47 billion — more than twice the size of the annual state budget — as of the end of September.

“It’s very difficult for a board to manage their assets without the ability to set COLAs based on the long-term health of the fund,” Brantley said. “The state does the same thing every year with teacher and state employee pay raises.”

Those are approved by lawmakers each year.

Brantley added that the proposal, which will be voted on by the Teacher Retirement System board for a second time on Nov. 19, doesn’t mean teachers, school administrators, college professors and others in the system won’t get cost-of-living increases in the future. It would just take a board vote.

Retirees, teachers and teacher organizations are dangerous groups to pick a fight with. Educators helped oust Barnes after they objected to the way he shoved through a pair of major school reform bills. Barnes, a Democrat, was upset by the Republican Perdue.

Democrats haven’t forgotten that, and state House party leaders put out a statement last week objecting to the Perdue administration’s proposal.

“We stand with teachers and retirees and in strong opposition to the proposal to slash COLAs because it is wrong,” said a joint statement from House Minority Leader DuBose Porter (D-Dublin) and Minority Caucus Chairman Calvin Smyre (D-Columbus). “The money for the COLAs was earned by the retirement system and should be awarded to those it was designated to help, our teachers and retirees.”

Retirees and teacher groups have been spreading the word about the proposed change for weeks, trying to get their lawmakers involved to stop it.

Tim Callahan, longtime spokesman for the Professional Association of Georgia Educators, said he doesn’t understand why the Perdue administration is pushing the change. Callahan’s organization has about 72,000 members. It plans to register its objections at the Nov. 19 meeting.

“The TRS is one of the most actuarially sound funds in the nation,” he said. “Why do you want to mess with it? It’s just not a smart thing to tell this to retired teachers, some who live on $20,000 to $25,000 a year. It’s not smart from a dozen different ways and it’s not necessary.”