Education

California Teachers Retire on Taxpayers' Dime

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As RiShawn Biddle points out in today's American Spectator, Californians have been jaded indeed in the face of pension scandal after pension scandal.

Not even the fact that 3,090 of its retired teachers are earning more than $100,000 a year in annuity payments causes a stir.

But even in the poster state for the We Are Our of Money phenomenon, the scale of fraud and deception at California State Teachers Retirement System (CalSTRS) beggars belief. Investing in hedge funds and other risky venture while assuming an 8 percent rate of return (a figure significantly higher than the 20-year compound annual growth rate for the S&P 500) has finally caught up with the teachers pension plan. They're copping to a $5 billion shortfall this year, money that will come from taxpayers. But that's nothing compared to what's coming.

If CalSTRS adjusted its investment growth to reality—including admitting that the past growth rates for its investments were inflated—taxpayers would face a $97 billion pension deficit, according to Manhattan Institute scholar Josh Barro and University of Arkansas graduate student Stuart Buck in a study released earlier this year.

This comes after waves of federal education bailouts, which the states used to continue business as usual rather than to make cuts and prepare for a rough future.

For more on the public sector pension crisis in California (and around the nation) go here and here.

NEXT: The TSA: They're Laughing At You, Not With You

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  1. Zo vhat ah you vaiting fowh? Komm to Kollivornia!

    1. Who’s THE COMMANDER?

  2. We Are Out* Of Money

    hedge funds and other risky ventures*

    1. Who’s THE COMMANDER?

  3. Instead of a pension, why don’t we just put them all in a gigantic commune camp, where they can live off the land together in harmony?

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  5. It’s for teh childrun!

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  6. You think this is bad? I lived in San Francisco and seriously thought about going into the SFPD after I graduated college. Why? Because they were paying over $85k/year + benefits. Why else? After 20 years, you get 90% of your last year’s pay in retirement, thanks to the war on terror fund. If you get a grad degree (I’d just go at night), you can make upwards of $115k/year. Ignoring inflation and all that jazz and I would be “retiring” at 43 with a $100k/yr pension plus health care for the rest of my life.

    1. Who’s THE COMMANDER?
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    2. Aaaaarrrrgh….

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    1. Fuck off, bitch.

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  8. It’s me.

    1. It’s me.

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  9. “”Everyone thinks that anyone with a brain must agree with them–liberals, conservatives, libertarian–you name it.

    They are all equally convinced that anyone who disagrees with them is a worthless excuse for a human being.

    Any participation on my part won’t change the political system in any way or how others choose to participate.

    Why should I care about politics at all?””

  10. I gotta get the fuck out of this state

  11. Candidate A even wants to privatize social security, leaving your retirement in the hands of greedy wall street bankers.

  12. “I like California: everybody’s rich there.” E.J.

  13. Let’s build another half billion dollar school. Why not?

  14. Just to correct a few mistakes in this article: Starting with dumbest title and ending with the last sentence, your bias leaves little fact to be digested. The best description of this article is drivel. How can you be expected to sway opinion when your argument is nonsense. If inciting anger is your only goal, your long term prospect at journalism is poor.

  15. It’s certainly going to be interesting to watch this play out when the funds run out of money. The taxpayer’s certainly won’t pay (they can just move away).

    Perhaps the only CA residents will one day be only the Civil Servants and the welfare types. Then the taxes paid by the Civil Servants will exceed their entire pensions.

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