Chad Aldeman's blog

  • People may assume that an "expensive" retirement must obviously translate into one that's also "generous" for workers. But that's not the way teacher pension plans work.
  • This afternoon, I spotted a tweet from a San Diego parent: 

    There's something particularly wrenching about being asked what services should be cut at your kid's school to pay for increased employee pension & healthcare costs, when most working parents don't have pensions. https://t.co/Vs6uMojuSt cc @sdschools

    — Ashley Lewis (@AshleyJPL) January 12, 2018

     

    I followed the link to the survey, and a message from the San Diego Unified School District said it was seeking input on how to resolve a growing budget shortfall due to "increases in costs outside of the district’s immediate control, such as healthcare costs, utilities expenses, and state retirement contributions that are all expected to rise for the foreseeable future." 

    In the pension world we call this "crowd out." Benefit costs are slowly crowding out the discretionary money available for states, districts, and schools to spend on other priorities. San Diego is now seeking input on what to prioritize in its cuts. Here's it's proposed list: 

  • So much of the pension debate is filled with "if only" statements, as if pensions were governed by angels rather than by fallible humans.
  • After zooming out and looking across the full working career, it becomes clearer that a portable benefit plan would be better for most teachers.
  • States can shift new workers into new retirement plans easier than many pension advocates claim.