CA Public School Teacher - Union Dues, Pension Contribution

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CollegePrudens
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CA Public School Teacher - Union Dues, Pension Contribution

Post by CollegePrudens » Mon Apr 23, 2018 3:52 pm

Hello (Public School Teachers in California),

My Spouse and I are approaching the time when we will trade off the "bread-winner" and "stay-at-home-parent" roles. My spouse expects to return to teaching as a public school teacher in Northern California in the Fall of 2019. My spouse has not taught in several years so we are not current on all of the financial items that determine the annual take home pay. (I currently do the finances in our household, but I have never worked as a public school teacher.)

Here are the specific questions:
  • What are the approximate union dues for a full-time teacher in California (I assume these are taken out pre-tax)?
  • What is the mandatory pre-tax contribution towards pension for a teacher in California?
I believe the union dues are taken out as a flat $ amount per school employee and the pension contribution is expressed as a %. In either case, the exact gross salary should not be material to the answer. However, if I am wrong on this, assume that the gross salary is 96,818 (from the salary schedule for Santa Clara Unified at https://unitedteacherssc.org/union-cont ... -schedule/ ; Santa Clara Unified is one of the potential employers we will be approaching...)

Thank you for your generosity, in advance.

PS1: In researching the first question above, I saw numbers in the $1200 vicinity in Washington State. I did not come across a good number for California.
PS2: In researching the second question above, I saw that pension contribution percentage is expected to increase to as high as 19.23% in the mid-term. However, the percentage contribution expected in the very near term (2018, 2019) was unclear from the articles that I read.
Live as if you were to die tomorrow; learn as if you were to live forever - Gandhi

Coato
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Re: CA Public School Teacher - Union Dues, Pension Contribution

Post by Coato » Mon Apr 23, 2018 4:12 pm

Off the top of my head I pay about double your Washington number in dues. The union for my district is a local one though. Not sure what your situation is.

I believe I contribute 8.5% of salary to Calstrs but I think the number is higher for newer hires (post 2012). I think the total contribution for me between district and myself is about 20% so maybe that is where your number is coming from.

We don't even see a pay stub unless we go down to the district and ask so it is hard to keep track of everything.

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Re: CA Public School Teacher - Union Dues, Pension Contribution

Post by bhtomj » Tue Apr 24, 2018 12:50 am

My wife pays just over $1000 PER year for union dues.

Here's a link for CalStrs on the contribution rates: https://www.calstrs.com/calstrs-2014-funding-plan
I did not realize the teacher contribution was over 10%. Better check a pay stub.

pshonore
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Re: CA Public School Teacher - Union Dues, Pension Contribution

Post by pshonore » Tue Apr 24, 2018 7:56 am

Spouses union due (as a CT Teacher) was always after tax. Not sure if that has changed. Tax Reform has eliminated union dues as a misc deduction (subject to 2% AGI floor) starting 1/1/18

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Re: CA Public School Teacher - Union Dues, Pension Contribution

Post by Ron Ronnerson » Tue Apr 24, 2018 8:28 am

I work in a district near the one your wife is considering (about 1/2 hour away). My union dues are about $1200/year and the mandatory pension contribution rate is 10.25%. For those who enter the CalSTRS system in 2013 or later, the rate is 9.2% (lower rate but less generous benefits).

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Re: CA Public School Teacher - Union Dues, Pension Contribution

Post by CollegePrudens » Tue Apr 24, 2018 8:59 am

bhtomj wrote:
Tue Apr 24, 2018 12:50 am
Here's a link for CalStrs on the contribution rates: https://www.calstrs.com/calstrs-2014-funding-plan
This is a very useful link. Thank you!

Would you (or anybody else for that matter) know what the phrases "2% at 60" and "2% at 62" mean?
Live as if you were to die tomorrow; learn as if you were to live forever - Gandhi

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CollegePrudens
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Re: CA Public School Teacher - Union Dues, Pension Contribution

Post by CollegePrudens » Tue Apr 24, 2018 9:07 am

Ron Ronnerson wrote:
Tue Apr 24, 2018 8:28 am
I work in a district near the one your wife is considering (about 1/2 hour away). My union dues are about $1200/year and the mandatory pension contribution rate is 10.25%. For those who enter the CalSTRS system in 2013 or later, the rate is 9.2% (lower rate but less generous benefits).
Thanks for this "first hand" number. I'll budget $1200.

I wonder how CalSTRS treats returning employees. My Spouse contributed to CallSTRS for 7 years prior to 2013. Any new job within the public school system will likely only start in 2019. So split before and after 2013!
Coato wrote:
Mon Apr 23, 2018 4:12 pm
Off the top of my head I pay about double your Washington number in dues. The union for my district is a local one though. Not sure what your situation is.

I believe I contribute 8.5% of salary to Calstrs but I think the number is higher for newer hires (post 2012). I think the total contribution for me between district and myself is about 20% so maybe that is where your number is coming from.

We don't even see a pay stub unless we go down to the district and ask so it is hard to keep track of everything.
Indeed it looks like the employee contribution rate is 9.205% if I understood the messages in this thread. One of the links upthread refer to 10.2% employee contribution. But my original estimate of 19%+ is clearly an over estimate for the employee contribution.
pshonore wrote:
Tue Apr 24, 2018 7:56 am
Spouses union due (as a CT Teacher) was always after tax. Not sure if that has changed. Tax Reform has eliminated union dues as a misc deduction (subject to 2% AGI floor) starting 1/1/18
Thank you for this correction. I'll move the union dues post-tax in my pro-forma income spreadsheet.
Live as if you were to die tomorrow; learn as if you were to live forever - Gandhi

pshonore
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Re: CA Public School Teacher - Union Dues, Pension Contribution

Post by pshonore » Tue Apr 24, 2018 9:12 am

CollegePrudens wrote:
Tue Apr 24, 2018 8:59 am
bhtomj wrote:
Tue Apr 24, 2018 12:50 am
Here's a link for CalStrs on the contribution rates: https://www.calstrs.com/calstrs-2014-funding-plan
This is a very useful link. Thank you!

Would you (or anybody else for that matter) know what the phrases "2% at 60" and "2% at 62" mean?
Just a wild guess but probably pension equals 2% times years of service times avg salary if you retire at 60 or 62. Implies somewhat less if you retire earlier. As an example in CT, you have to be 60 or have 35 years of service to get the 2%. Otherwise its prorated.

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Re: CA Public School Teacher - Union Dues, Pension Contribution

Post by Ron Ronnerson » Tue Apr 24, 2018 2:24 pm

CollegePrudens wrote:
Tue Apr 24, 2018 9:07 am
Ron Ronnerson wrote:
Tue Apr 24, 2018 8:28 am
I work in a district near the one your wife is considering (about 1/2 hour away). My union dues are about $1200/year and the mandatory pension contribution rate is 10.25%. For those who enter the CalSTRS system in 2013 or later, the rate is 9.2% (lower rate but less generous benefits).
Thanks for this "first hand" number. I'll budget $1200.

I wonder how CalSTRS treats returning employees. My Spouse contributed to CallSTRS for 7 years prior to 2013. Any new job within the public school system will likely only start in 2019. So split before and after 2013!

Unless your spouse cashed out the pension contributions when taking a break from teaching, I believe the CalSTRS 2% at 60 would still apply. This would mean contributing 10.25% toward the pension. 2% at 60 applies to people who entered the CalSTRS system prior to 1/1/13 while 2% at 62 applies to people who enter the system after 1/1/13.

The 2% at 60 does have some features which may not be apparent based on the name alone. Under this system, you get 2% of the average of your final three year's compensation for each year worked. However, if you have more than 25 years of service, only the highest year of salary is used to calculate the benefit. If you have at least 30 years of service, you also get a 0.2% career factor added to your age factor. The age factor is maximized at 2.4% and is reached at age 63 if one does not have at least 30 years of service. However, with the career factor added (a bonus of sorts), the maximum age factor can be reached at age 61.5. These types of perks are not available to those who began in CalSTRS after 1/1/13. I should add that this is my understanding from attending CalSTRS workshops and reading I've done online. I'm by no means an expert on CalSTRS.

You may want to look through the CalSTRS Handbook: https://www.calstrs.com/calstrs-member-handbook

Also, here is a CalSTRS Pension Calculator that may be worth plugging some numbers into for planning purposes: https://resources.calstrs.com/CalSTRSCo ... nefit.aspx

hale2
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Re: CA Public School Teacher - Union Dues, Pension Contribution

Post by hale2 » Tue Apr 24, 2018 5:49 pm

I believe CA teachers don't contribute to Social Security, so that's a 6.2% savings.

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Re: CA Public School Teacher - Union Dues, Pension Contribution

Post by GenXer » Tue Apr 24, 2018 7:24 pm

I believe 19% is what California EMPLOYERS (school districts) will be contributing by 2022. https://www.calstrs.com/post/contributions-0
Part of the CALSTRS 2014 Funding Plan is that by 2022, more than 30% of the equivalent of a teacher's salary (roughly 10% from teachers, 19% from district, and a little bit from the state) will be going into the DB plan (pension).

As you're looking at salary scales for the districts, make sure to look into the costs of health benefits for families (like salary schedules, the info is easy to find). The variations in cost and choice among Bay Area school districts can be striking, especially when it comes to family coverage. Healthcare costs affect take-home pay, so it's worth looking at both salary and healthcare premiums.

billy269
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Re: CA Public School Teacher - Union Dues, Pension Contribution

Post by billy269 » Tue Apr 24, 2018 10:54 pm

Ron Ronnerson wrote:
Tue Apr 24, 2018 2:24 pm
CollegePrudens wrote:
Tue Apr 24, 2018 9:07 am
Ron Ronnerson wrote:
Tue Apr 24, 2018 8:28 am
I work in a district near the one your wife is considering (about 1/2 hour away). My union dues are about $1200/year and the mandatory pension contribution rate is 10.25%. For those who enter the CalSTRS system in 2013 or later, the rate is 9.2% (lower rate but less generous benefits).
Thanks for this "first hand" number. I'll budget $1200.

I wonder how CalSTRS treats returning employees. My Spouse contributed to CallSTRS for 7 years prior to 2013. Any new job within the public school system will likely only start in 2019. So split before and after 2013!

Unless your spouse cashed out the pension contributions when taking a break from teaching, I believe the CalSTRS 2% at 60 would still apply. This would mean contributing 10.25% toward the pension. 2% at 60 applies to people who entered the CalSTRS system prior to 1/1/13 while 2% at 62 applies to people who enter the system after 1/1/13.

The 2% at 60 does have some features which may not be apparent based on the name alone. Under this system, you get 2% of the average of your final three year's compensation for each year worked. However, if you have more than 25 years of service, only the highest year of salary is used to calculate the benefit. If you have at least 30 years of service, you also get a 0.2% career factor added to your age factor. The age factor is maximized at 2.4% and is reached at age 63 if one does not have at least 30 years of service. However, with the career factor added (a bonus of sorts), the maximum age factor can be reached at age 61.5. These types of perks are not available to those who began in CalSTRS after 1/1/13. I should add that this is my understanding from attending CalSTRS workshops and reading I've done online. I'm by no means an expert on CalSTRS.

You may want to look through the CalSTRS Handbook: https://www.calstrs.com/calstrs-member-handbook

Also, here is a CalSTRS Pension Calculator that may be worth plugging some numbers into for planning purposes: https://resources.calstrs.com/CalSTRSCo ... nefit.aspx
This is exactly right. But the PEPRA law that was passed is very confusing for returning employees, it states you are under the old formula if

"California Public Employees' Pension Reform Act of 2013 The California Public Employees’ Pension Reform Act of 2013 made changes to the plan structure that primarily affect benefits for members first hired on or after January 1, 2013, to perform CalSTRS creditable service. These members are under the CalSTRS 2% at 62 benefit structure.
Members under the CalSTRS 2% at 60 benefit structure are those who:
• Were first hired to perform CalSTRS creditable activities on or before December 31, 2012.
• Were a CalSTRS member before 2013, terminated their membership and then returned to active membership on or after January 1, 2013.
• Performed CalSTRS creditable activities that were subject to coverage under a different retirement system, including Social Security, on or before December 31, 2012.
• Were members of a concurrent retirement system on or before December 31, 2012, and who performed activities under that system within six months of becoming a CalSTRS member."

Sounds like your spouse would be under the older, better formula to me.
Last edited by billy269 on Tue Apr 24, 2018 11:22 pm, edited 1 time in total.

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Re: CA Public School Teacher - Union Dues, Pension Contribution

Post by anonenigma » Tue Apr 24, 2018 10:58 pm

Ron Ronnerson wrote:
Tue Apr 24, 2018 8:28 am
I work in a district near the one your wife is considering (about 1/2 hour away). My union dues are about $1200/year and the mandatory pension contribution rate is 10.25%. For those who enter the CalSTRS system in 2013 or later, the rate is 9.2% (lower rate but less generous benefits).
+1

He will likely enter the 2% at 62 program, which does make a smaller contribution. Better if he can reenter the 2% at 60 program and pay 10.25%.

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Re: CA Public School Teacher - Union Dues, Pension Contribution

Post by CollegePrudens » Wed Apr 25, 2018 2:16 pm

pshonore wrote:
Tue Apr 24, 2018 9:12 am
Just a wild guess but probably pension equals 2% times years of service times avg salary if you retire at 60 or 62. Implies somewhat less if you retire earlier. As an example in CT, you have to be 60 or have 35 years of service to get the 2%. Otherwise its prorated.
Indeed.
Ron Ronnerson wrote:
Tue Apr 24, 2018 2:24 pm
You may want to look through the CalSTRS Handbook: https://www.calstrs.com/calstrs-member-handbook
The handbook that Ron linked to goes into the details of the plan. (Ron - thanks for the pointers and a summary of plan).
hale2 wrote:
Tue Apr 24, 2018 5:49 pm
I believe CA teachers don't contribute to Social Security, so that's a 6.2% savings.
Correct. The handbook referred to above says so too and I have modeled appropriately.
GenXer wrote:
Tue Apr 24, 2018 7:24 pm
As you're looking at salary scales for the districts, make sure to look into the costs of health benefits for families (like salary schedules, the info is easy to find). The variations in cost and choice among Bay Area school districts can be striking, especially when it comes to family coverage. Healthcare costs affect take-home pay, so it's worth looking at both salary and healthcare premiums.
Thanks for the pro-tip. I am currently using the family healthcare premiums listed for Cupertino Union https://www.cusdk8.org/cms/lib/CA022184 ... 0Staff.pdf to plug the numbers. Will refine as we move closer to landing a job.
billy269 wrote:
Tue Apr 24, 2018 10:54 pm
<SNIP>
Sounds like your spouse would be under the older, better formula to me.
I agree.
anonenigma wrote:
Tue Apr 24, 2018 10:58 pm
He will likely enter the 2% at 62 program, which does make a smaller contribution. Better if he can reenter the 2% at 60 program and pay 10.25%.
I believe the old program applies as the previous contributions to the pension (pre-2013) were not cashed out.

Thanks everyone for all your help. One key takeaway is that the CalSTRS pension program is its own beast that will take time and effort to fully comprehend. The CalSTRS pension program also interacts with social security benefits so developing a working understanding of the two together will be a project onto itself.
Live as if you were to die tomorrow; learn as if you were to live forever - Gandhi

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Re: CA Public School Teacher - Union Dues, Pension Contribution

Post by anonenigma » Wed Apr 25, 2018 2:24 pm

[quote=
I believe the old program applies as the previous contributions to the pension (pre-2013) were not cashed out.

Thanks everyone for all your help. One key takeaway is that the CalSTRS pension program is its own beast that will take time and effort to fully comprehend. The CalSTRS pension program also interacts with social security benefits so developing a working understanding of the two together will be a project onto itself.
[/quote]

Great if you can reenter the 2% at 60 plan.

CalSTRS isn't that complicated. The formula is years of service x highest salary (avg. of three consecutive years if you have fewer than 25 years) x an age factor (.014 at 55, .02 at 60 and up to .024 at 63).

Due to the Windfall Elimination Provision, your SS benefit will be reduced unless you have a large number of years of SS credited-work.

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Re: CA Public School Teacher - Union Dues, Pension Contribution

Post by pshonore » Wed Apr 25, 2018 3:13 pm

And the CalSTRS member will likely not be eligible for a Spousal or Survivor benefit due to the GPO (Govt Pension Offset). Also to avoid the WEP, you need years of "substantial" earnings (defined on the SS website)

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Re: CA Public School Teacher - Union Dues, Pension Contribution

Post by jdouge » Fri Apr 27, 2018 1:18 am

Dues at $1000/year is consistent with where I teach (Central Coast). However, note that mandatory union contributions for public employee unions will probably be struck down by the SCOTUS later this year.

That said, buying into the "old" retirement tier as a returning teacher is (in the long-term) a wise decision, generally. YMMV depending on your other financial positions.

Can't point out enough that CA teachers do not pay into and will not receive SSA. This means that the long-term viability of the CALSTRS pension fund is critically important to any decision you make. State pension funds in CA are constitutionally protected at the state level, but the case before the SCOTUS may undermine unions' ability to defend that. There are several threads on this forum that reference the health of CALSTRS. Most of them are not optimistic.

Best of luck to you. I am in roughly the same boat. Thanks to your spouse for returning to the teaching profession.

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Re: CA Public School Teacher - Union Dues, Pension Contribution

Post by CollegePrudens » Sat Apr 28, 2018 4:54 pm

anonenigma wrote:
Wed Apr 25, 2018 2:24 pm
CalSTRS isn't that complicated. The formula is years of service x highest salary (avg. of three consecutive years if you have fewer than 25 years) x an age factor (.014 at 55, .02 at 60 and up to .024 at 63).
I should rephrase. My relative unfamiliarity with CalSTRS requires some work on my part to understand the nuances of the pension plan.
pshonore wrote:
Wed Apr 25, 2018 3:13 pm
And the CalSTRS member will likely not be eligible for a Spousal or Survivor benefit due to the GPO (Govt Pension Offset). Also to avoid the WEP, you need years of "substantial" earnings (defined on the SS website)
Indeed. These are two of the nuances I am spending time on fully comprehending.
jdouge wrote:
Fri Apr 27, 2018 1:18 am
Can't point out enough that CA teachers do not pay into and will not receive SSA. This means that the long-term viability of the CALSTRS pension fund is critically important to any decision you make. State pension funds in CA are constitutionally protected at the state level, but the case before the SCOTUS may undermine unions' ability to defend that. There are several threads on this forum that reference the health of CALSTRS. Most of them are not optimistic.

Best of luck to you. I am in roughly the same boat. Thanks to your spouse for returning to the teaching profession.
Indeed - no SS benefits. So a full understanding of the CalSTRS pension plan (and its current state) becomes even more important.

Thanks you for the kind words. Spouse is excited about returning to teaching after a long hiatus.
Live as if you were to die tomorrow; learn as if you were to live forever - Gandhi

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