1) Is NEA Surfing Its Own Pension
Tsunami? The growing obligation to fund public
employees' defined benefit pensions is the stuff of
daily media stories and commentary, and is the constant headache of
state governments and both political parties. Public sector unions defend
these plans vigorously, but they also have to finance them for their own
employees. While the National Education Association has its own share of
short-term budget problems, the long-term picture also indicates shoals
The union staff pension fund covers
virtually every permanent employee who works at NEA headquarters in
Washington, DC, as well as participating workers in state and local
affiliates. The current number of participants in the plan is unknown to
outsiders, but the benefits are generous. NEA employees contributed nothing
to their defined benefit plan, and were able to enjoy the best of both
worlds, as NEA offered matching contributions to a voluntary 401(k) defined
contribution plan as well.
Tough times led the national union to
require employees hired on or after June 9, 2009 to contribute 3.5% of the
pension amount, and the 401(k) plan was suspended in the latest budget.
The pension numbers are staggering,
considering the number of employees/retirees involved must only amount to
some several thousand. As of January 1, 2011, NEA had accumulated $644.7
million in pension liabilities, for which it had $556.3 million available.
For that fiscal year, the union contributed $25.2 million to the staff
But those figures are a snapshot, and
don't account for some important facts. Staff salaries rise over time, and
with them the amount of pension contributions and liabilities. NEA estimates
that with projected staff salary increases, its pension payout obligations
are almost $700 million.
State governments have learned that
these liabilities go from a problem to a catastrophe when the number of
contributors to the plan decreases while the number of beneficiaries
increase. The parallel issue at NEA is the loss of members, leaving the
union with less dues revenue to fund rising staff pension liabilities.
Pension reform in politically difficult
in every state, but is even more problematic internally for unions, since
they are ideologically wedded to the defined benefit approach. The question
for both states and unions is how happily younger employees will tolerate
lesser benefits for themselves to fund better benefits for their elders.
2) Questions About the AFT
Convention. The American Federation of Teachers
wrapped up its biannual convention in Detroit today, and a few items have me
a) How did AFT get
New York Times
columnist to show up when
b) If AFT is changing to "solution-driven
unionism," what does that make the current unionism?
c) It's not surprising that Vice
President Joe Biden delivered
essentially the same speech as he did to NEA, but couldn't the delegates
dream up a different chant?
d) How did the mainstream media fail to
who was protesting Biden's speech?
e) Is it a good thing that AFT members
can get a
25% discount on
something like this?
3) Last Week's Intercepts.
Intercepts, covered these topics from July 24-30:
Hiring!. And announces its digital engagement.
NY Times Enrollment Story Only Half the Picture. Immigration
crackdowns leading families to flee Tucson and San Bernardino for... Las
Vegas, Corona Norco and Cypress-Fairbanks?
Latest Twist in the Fresno Teachers Association Game of Thrones. They
even called in the gold cloaks.
Behind the Scenes of NEA Charter School Organizing. Nothing to worry
Unfriend of Education. A fugitive Wisconsin Democrat flees the Wisconsin
Democrats for a few days, but
returns to the fold.
4) Quote of the Week.
"The numbers of teachers are going up faster than are the
numbers of students. That is a ticking time bomb. … With an economic
downturn, the troubles with our economy, it's hard to picture how school
districts can sustain that increase and pay for it. I don't see it as
sustainable."- Richard Ingersoll, a professor in the
Graduate School of Education and Sociology at the University of Pennsylvania.