The state of Connecticut spends a lot of money supporting school districts, paying nearly 10 percent of the state budget in direct grants.
And each year cities and towns put up a fight at the Capitol to keep their share of funds.
The state’s educational cost sharing grants are paid based on a complicated formula that is intended to determine need.
The state also pays to build most schools, at least in part, but it varies the subsidies for each district. For districts with limited resources, the state gives a bigger subsidy.
But when it comes to teacher pensions, the system of payments is not so intentional.
Teacher pensions are based on a statewide formula – years of service times 2 percent times final salary – that doesn’t take district ability to pay into account.
Because wealthier districts tend to pay their teachers more, the state pays their teachers bigger pensions, reversing the way other state education subsidies work.
When a school district pays a teacher’s salary, they are only paying a portion of that salary’s true cost. The state ends up paying the other portion when the teacher retires.
While ECS grants make up 10 percent of the state budget, they are falling in proportion to the state budget. Teacher pension contributions, on the other hand, are nearly 4 percent of the state budget and growing.
Retired teachers from Danbury, the district with the highest average, get about $43,700 per year, according to data obtained from the Teachers’ Retirement Board. Portland’s retired teachers, at the bottom of the list, average $28,500.
Hamden is the median district with average payments of about $36,000.
The range is much more drastic when the state’s contribution in the form of pensions is compared to its direct contribution through ECS grants.
Westport gets 6.5 times as much for pensions as it does from ECS, while Griswold gets less than one-fifth its ECS grant in the form of pension payments.
Greenwich, Weston, New Canaan and Ridgefield all get more than five times as much from pensions as they do from ECS.
Greenwich is among the bottom third of ECS recipients, but with pension and ECS payments combined it is in the top third of recipients. Stamford moves from the middle to the top 15.
The biggest cities are not negatively affected by the pension subsidy because their ECS grants are so much larger. The losers are mostly small and rural districts: Oxford, Putnam, Lebanon, Thomaston, Thompson, East Haddam, Somers, Canton, East Hampton and Griswold.
I agree the state shouldn’t underfund teacher pensions. The pension fund would not be self-funding if the state left it alone. Teachers do pay into the fund, but more than two-thirds of the cost is paid for by the state, including all downside market risk.
You neglect to share that teachers pay into the pension fund; which the state has traditionally illegally invaded to pay other debts. This pension fund would be self supporting if the state had left it alone. I resent the statement about how much teachers pensions take of the state budget. They paid for it.
irishtimes.comirishtimes.comPension Funds is an arrangement to provide people with an income when they are no longer earning a regular income from employment.The common use of term pension is to describe the payments a person receives upon retirement to be an independent person in life even after retirement.
According to the latest actuarial report on TRS the members put in 6% and the State is putting in 19%, I sure would like my company to match my 6.2% SS with a 19% 401k match.
From 6/30/2008 to 6/30/2010, dispite the state putting in its recommended contribution, the Unfunded Actuarial Accrued Liability (UAAL) went from 6.5b to 9.1b and that is after a significant market recovery by 6/30/10. To make matters worse, the actual market value as of 6/30/10 was 3.0b less than the Actuarial Value used in calculation the UAAL.
Malloy’s budget does nothing to address this Pension Tsunami.
Thanks for your comment. All teachers pay the same percentage of their income. This article addresses cost-shifting from districts to the state, which pays 93 percent of the cost. -Zach
How do the teacher’s own contributions (payroll deductions) which replace their requirement to pay social security get take into account in this analysis? Higher paid teachers pay more of their salaries into the system. Not all of the pension is funded by the state.