Indiana Public School Teachers Need To Worry About Their Pension Fund and Not Politics

Every time I turn on social media or browse news sites, I see Indiana school teachers posting something against President Trump’s nominee for Secretary of Education, Betsy Devos. My honest opinion is that President Trump and the Republican Congress should just dump the entire federal agency and the let the states run their schools. Of course, living in the world we do if a proposal like this is mentioned, “The world will end” doomsayers come out in full force.

Instead of worrying about Betsy Devos, educators and politicians need to focus on a growing pension crisis here in the state. Serious debate is needed with the acceptance of changes are needed so taxpayers are not screwed because adults don’t want to accept economic reality.

Here’s some latest finding from

The $30 billion Indiana Public Retirement System has released its annual report for the year ending June 30, 2016. INPRS has about 86 percent of the money needed to meet projected future retirees’ benefits—excluding the pay-as-you-go Teachers Retirement Fund, which is about 30 percent funded.

The glaring factor that needs attention at INPRS is investment performance—it, like most pension plans, has suffered from poor returns the past decade.

INPRS’ assumed rate of return is 6.75 percent, which is the annual rate of return the fund must earn to maintain a well-funded status. If returns fall short, taxpayers must eventually make up the difference with higher contributions to the fund. Last year, Indiana taxpayer contributions were $878 million from the Indiana General Fund, while $923 million was sent in from counties, cities, towns and school districts.

The obvious conclusion is that pension plans must improve their performance—or significantly reduce their assumed rate of return. Pension boards do not want to reduce the rate because that increases the plans’ liabilities and, hence, taxpayer contributions.

The push back I will get is the obvious, “You hate teachers”. No, I respect taxpayers and accept current realities. Teachers work for the taxpayers and the taxpayers now have so much access to information like that of above, they are starting to question a lot what they are asked to pay for. Around half of Americans have no retirement savings at all, so it’s very hard for them to grasp why they have to pay for someone else’s retirement while they have ZERO.

I don’t have much faith Indiana teachers or politicians will tackle this issue. When the financial crisis does hit this pension, don’t expect taxpayers to fork over the money either.


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