Issue link: http://educator.cta.org/i/63126
raising the retirement age will reduce the amount of time retirement benefits must be paid, there are other variables to consider. During a February Senate hear- ing, Ed Derman, deputy chief executive officer of the California State Teachers' Retirement System, testified that by mak- ing CalSTRS members work longer, the government can expect to see increased health care costs and disability benefits for older workers, which could offset sav- ings the government might expect. Although the governor says that SOLVING THE ISSUE — OR CREATING A NEW ONE? More importantly for CalSTRS members, under the governor's proposal in which two-thirds of their CalSTRS benefit would come from a revised defined benefit (pen- sion) and one-third from a 401(k)-type plan, members will experience a signifi- cant reduction in their standard of living. spend a full 35 years in their career and retire at age 67 can expect an 18 percent reduction in retirement benefits under the governor's proposal. But employees who retire before age 67 would have their ben- efits reduced 40 percent and would receive just 35 percent of their final salary at retirement, rather than the 62 percent they would currently receive. "Remember that CalSTRS members Derman testified that employees who don't receive Social Security," Derman told other impacts as well. Some, like Maggie Ellis, chair of State Council's Retirement Committee, question whether raising the retirement age will skew the age of the entire teaching force. Those teachers will be at the top of the salary schedule, which Raising the retirement age can have " the committee. "Essentially, that's it. And it's way below what a person could possibly expect to retire and maintain their stan- dard of living. could also cause financial headaches for school districts. "We want to create a natural attrition, where younger teachers replace those who are about to retire. But with this, we create older and older teachers," said Ellis. "Are we really solving the issue, or creating a new one?" The governor also didn't consider the contributions California's retired teach- ers make to their local communities and the local economies. Not only do they contribute more than $34.5 billion in eco- nomic output to the state each year, but retired teachers are the backbone of many communities, volunteering in community organizations, in schools, and on local boards. As one observer wryly pointed out, "Who do they think run the polls on Election Day?" By Dina Martin Benefits you'll value. Service you'll appreciate. Benefits you'll value. Service you'll appreciate. This California Teachers Association Platinum Plus® This California Teachers Association Platinum Plus® tool you can count on for all your purchasing needs. 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