Union Pension Battle Looks a Little Different on the Other Coast

I’ve spent a lot of time on the problems with the NYSUT pension fund. The California Teachers Association is on the opposite end of the spectrum when it comes to overall financial health. CTA is loaded, but it still has some issues with staff retirement costs.

The union’s pension fund is in the “red zone,” meaning it is not funded up to the 80 percent level. CTA management and staff entered into negotiations to fix the problem, and the staff proposed a diversion of some contributions from employee 401k accounts to the defined benefit pension plan for a period of 10 years.

The staff union is now complaining that CTA management wants to make that shift permanent, which it thinks is unnecessary. Additionally, CTA proposed that pensions be based on an employee’s highest annual earnings. The current contract bases it on the highest amount earned in a month. As you can imagine, one particularly busy month late in an employee’s career, say during a political campaign, could lead to a spike in overtime and holiday work, culminating in a pension boon that lasts a lifetime.

This, plus foot-dragging in negotiations, has led to some discord between CTA managers and staff. However, it doesn’t rise to the level of a crisis, because the pie is so large everyone is sure to get his fill in the end. The staff contract does not expire until August 31, so there is still plenty of time to settle.