California Foundation for Fiscal Responsibility President Marcia Fritz:
California taxpayers would save billions of dollars that would flow to public schools, community colleges and universities if state and local public employees retired with benefits comparable to those provided to employees of Silicon Valley’s top companies. Teachers’ jobs would be saved and school programs spared.
California Foundation for Fiscal Responsibility will release a study soon that shows California’s largest and best companies typically spend one-third what the state spends on employee retirement benefits. If California spent the same percentage on retirement benefits as large private employers, taxpayers would save nearly $3 billion this year alone, enough to pay the salaries of 40,000 teachers. The savings achieved by school districts and local governments are an added bonus.
Teachers’ retirement benefits aren’t the problem. Our report shows that teachers contribute more of their salaries and collect less in benefits than other public employees. Prison guards, for example, retire seven years earlier than teachers with benefits that are 77 percent higher. Since teachers aren’t covered by Social Security, their lifetime retirement income is about the same as retirees from large Silicon Valley companies who participate in their employers’ 401(k) plans, earn similar annual wages and retire at the same age.
The problem that teachers and taxpayers must resolve is the lack of a sustainable funding mechanism for CalSTRS, the teachers’
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