John H. Mitchell, who taught in the Oakland public schools for 34 years, is one of California’s luckier retired teachers: the longtime Berkeley resident doesn’t have to sell his house and move somewhere cheap.
“We owe $520, and it will be paid off in August,” said Mitchell, president of the East Bay chapter of the California Retired Teachers Association.
Others have not been so lucky, especially in the Bay Area. Stories abound of retirees receiving less than $1,000 a month because inflation has diminished retirement pensions that were low to begin with, compared to those of teachers retiring now.
“The teachers, they lived here and taught here for 20 or 30 years, they want to stay here,” said Mitchell. A folk-singer on the side, he played with Pete Seeger at the 1963 U.C. Folk Festival and now entertains at assisted living facilities for the elderly.
Last month, a bill intended to help the most elderly of the state’s retired teachers – some 16,000, according to the CRTA – passed both the state assembly and senate with overwhelming support.
“It would help mostly those teachers over 80 years old,” said Mitchell, who is 77.
“Typically these are not only the oldest teachers,” said Ed Ely, spokesperson for the CRTA, “but they’re the poorest, because they retired when teachers’ salaries and pension benefits were substantially lower than they are today.”
The pension adjustments, called “purchase power protection” in official jargon, are drawn from a state fund reserved specifically for this purpose. The $800 million Supplemental Benefit Maintenance Account draws on federal land sales and, Ely said, could fund AB135’s provisions for 30 years.
Sponsored by assemblymember Sally Halvice of Los Angeles County and co-sponsored by Berkeley Assemblymember Dion Aroner, the bill would guarantee that retirees receive 80 percent of the value of their benefit at the time of retirement, rather than the current 75 percent.
“It means somebody who retired earlier is going to get more tacked onto their retirement,” Mitchell said.
Still, AB135, now sits on Gov. Gray Davis’ desk – a potential victim of statewide belt-tightening amidst lowered economic prospects, as well as labor politics. “One of the bill’s problems is that the PERS (Public Employees Retirement System) will want the same thing,” Mitchell said.
The governor has until Monday to act, and it will become law if he neither signs it nor vetoes it.
Teachers who retired before 1985 were largely passed over last year when a projected $12 billion surplus in the state teachers’ pension fund set off a round of new laws to increase retirement benefits.
For the first time, because of the changes, teachers who served more than 25 years have their pensions computed based on the teaching year in which they received their highest pay. (Pensions were previously calculated based on the average of the highest three years in a row.) Service in summer school and some extracurricular teaching also became eligible for credit toward pensions.
Teachers who stayed in the classroom the longest are now awarded flat bonuses of $200 a month for 30 years, $300 a month for 31 years, and $400 a month for 32 years or more. Another law provides an “ad-hoc” increase of 1 to 6 percent to retirement benefits, depending on length of career.
Ely said that as a result of these changes, “a teacher now probably has a 30-40 percent better retirement than a teacher who retired 20 years ago or more.”
Mitchell and other long-time retirees did benefit from one of last year’s laws: Medicare payments, previously $300 per person covered, are now taken care of by the state.
“I figure I paid $10,000 or $20,000 dollars for medical insurance before they did this,” Mitchell said.
The long-term goal of the CRTA, Ely said, is to push the purchasing power protection up to 100 percent of a retiree’s highest annual salary.
Mike Steinman, a spokesperson for Assemblywoman Sally Havice, said he had no indication of where the governor stood on the bill. It has support from both main teachers’ unions, seniors’ organizations, the Association of California School Administrators, and the Faculty Association of California Community Colleges, he said.
“This is really just a very incremental leap, but it helps,” said Steinman. “It will make a difference in the long run to those who have more than earned this.”