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Ed100 model for California teacher pensions
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Modified 2022
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This sheet contains data used in charts for Ed100 Lesson 3.11
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It examines the expected incremental lifetime pension value added during each year of employment
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There are two similar but distinct systems:
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2% at 60 (the system for teachers who joined STRS before 2014)
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2% at 62 (after 2014)
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The "at 60" or "at 62" designation is the age when teachers can retire and start receiving full pension benefits.
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Both cases make the following assumptions:
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Based on the 10-month salary schedule for Oakland Unified:
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See the OUSD Pay 2022 tab of this workbook
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Assumes consistent use of 10-month salary option
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Assumes gradual advancement to BA+90
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Assume death at age 91 (average longevity for female STRS members as of 2021 analysis)
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https://www.calstrs.com/calstrs-releases-data-on-member-retirement-preparedness-in-sustainability-report
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https://www.calstrs.com/sustainability-report
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The lifetime value of a teaching career in STRS jumps dramatically after age 55
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because one element of the formula is the "age factor", which more than doubles from 1.16% at age 54 to 2.4% at age 65
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2.06896551724138 multiple
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Most teachers don't stay that long, leaving huge $ on the table: https://www.educationnext.org/why-most-teachers-get-bad-deal-pensions-state-plans-winners-losers/
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Current administrators at retirement can make BANK in retirement. There are limits for future high earners: https://www.calstrs.com/limits
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The STRS payment in retirement formula =
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Final compensation x Years worked x "Age Factor"
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Inflation is beyond the scope of this model
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This model does not account for loss of purchasing power due to inflation
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However, STRS protects loss of purchasing power beyond 85% (based on CPI-U)
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https://www.calstrs.com/inflation-protection
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https://www.calstrs.com/calstrs-finishes-with-1-3-return-beats-total-fund-benchmark-in-volatile-fiscal-year-2021-22
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https://www.calstrs.com/files/ed2c55961/MemberHandbook2022.pdf
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The most important source of information is actuarial data from STRS as reported in its annual comprehensive financial report
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2021:
https://www.calstrs.com/files/b43a53a11/acfr2021.pdf
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page 128
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Additional data is drawn from sample district pay plans (OUSD, San Mateo).
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Interpretation from the Berkeley Labor Center,
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2014
https://laborcenter.berkeley.edu/most-california-teachers-working-today-are-here-for-the-long-haul-and-better-off-with-a-db-pension/
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