Wednesday, July 7, 2010

The Year 2001 And Texas Retired Teachers

    September 11thThe September 11th Terrorist Attacks (Days That Changed the World) is another day that will “live in infamy“. As a matter of fact, on a macro level the whole year will probably live in infamy, given the fact that it lead to war. However, this blog is concerned with the more micro level and two acts of the Texas  legislature that were passed in 2001. The two acts concerned :
 Working after retirement
Cost of living adjustment

                                                    Working After Retirement

        Before 2001 there were no restrictions about working after retirement; a retiree could continue working after retiring  in a public educational establishment as much as he/she desired. However by 2001 there was much concern that many teachers and administrators were working out agreements with their districts that allowed them to retire, then be rehired at their former job, be compensated as they had always been  and also draw their TRS annuity The Financial Insider's Annuity Guide: Understanding Annuities And Your Financial Portfolio. Because of fear that the TRS  fund would be severely damaged by this practice, the legislature passed a law that limited retirees in the amount of time they could work in public schools and universities . Retirees could work only 50% of what would be considered full time. There was no limit on working in private schools. If I remember right TRTA supported this 2001 law because they were  quite appropriately concerned about the viability of the  TRS fund .

           However I believe that some reforms of the 2001 legislation would be in the best interest of retirees. Please indulge me a couple of personal examples of my experience with the legislation.

            When I retired from the public schools in 2005, I continued with my part time job teaching  classes in a community college Because the community colleges consider five classes as full time I was allowed to teach only two classes, since obviously I could not teach 2.5 classes. In addition since the community colleges pay by course I was limited, in my case, to a  salary of $3,400 per semester or at most $10,200 a year ; but someone hired by a public school for one half day could earn half of a full time teacher’s pay , let’s say $20,000.

             A second surprise I received that first year was in the Summer when I taught my usual schedule, two classes in the first semester but none in the second semester. In July I received a  miserable missive in the mail(miserable for me anyway) which informed me that I would have to return my annuity to TRS for the month of June since I had exceeded the amount I was allowed to work. It seems that  2  classes per semester  is considered full  time in the Summer, so I was in violation. Notice that the salary I received for the Summer was exactly the same I would have received had I taught one class per semester, the allowable amount. I called TRS and pleaded ignorant,(not hard in my case) and fortunately for me  was able  to speak with a very nice lady in TRS who told me I would be forgiven this time but not a second time. I thanked her profusely and made sure there was no “second time”. I know another retiree who was asked to return their annuity because they taught two college classes and did some substituting. The 2001 law allows unlimited substituting but  if one reaches the 50 % rule , no substituting is allowed.

    This 2001 work after retirement law is confusing enough that some colleges have a full time staff member assigned to assuring no one breaks the rule . I even had a staffer at TRS  tell me over the phone that they wished the law would be repealed because of the amount of confusion from retirees and even occasionally on the part of TRS staff themselves.  I believe that ,though the 2001 law had some merit, that  reforms are needed to make this law conform to the best interests of  retirees today. My suggested reforms are:

     1. Simply require that a retiree cannot work full time for one year after retirement. This rule is already in effect for principals and assistant principals and should be a sensible solution for all.

     2. Require that any retiree who returns to work will pay into the TRS fund but cannot expect any larger annuity from the fund than the annuity earned at the time of retirement. This should actually strengthen the fund and give the retiree the option of whether they wish to work full time. I believe this law especially needs reform given the cost of living problem for retirees.How to Love Your Retirement: Advice from Hundreds of Retirees (Hundreds of Heads Survival Guides)

                                                      The Last COLA

           For some inexplicable reason whenever I hear or write the word cola, my mind snaps back to my childhood and the drink RC Cola. (Anyone remember those? Are they still around?) Oh well, forgive me for that aside and back to the COLA that is the topic of this blog. Another act of the legislature in 2001 was the granting of a cost of living adjustment  to retired teachers. This has turned out to be the last cost of living adjustment. That means for the last ten years when inflation has averaged 3 % a year that Texas retired teachers have lost something like 20 % of their spending power More explicitly a retiree who receives $40,000 at retirement in 2001 would now have the equivalent annuity of $32,000. That is the reason that the staff of Texas Retired Teachers Association (TRTA) and many members on the local level have worked so hard to get the Texas legislature to grant a  permanent cost of living adjustment.  I think

          Will they succeed in getting this cost of living adjustment  at the next legislative session. Let us hope so; but I fear not. The reason I fear not is that a looming battle is near on funding public pensions throughout the country with states like Colorado having passed legislation to reduce the amount of COLA going to retired teachers and state personnel. . In addition the Texas Legislature is under pressure from many fronts to spend more money on highways, prisons welfare, schools etc; and to keep from raising taxes.

           I know that scepticism toward our legislators is a Texas tradition Stand Proud (Texas Tradition Series No 13) ( No man’s life or property is safe as long as the legislature is in session)  but I think as Texas citizens we have to feel some sympathy for the dilemmas they face. After all we are, in addition to being retired Texas teachers ,also taxpayers, and use services such as driving on the highways. So can we get our Cola  and still help the state keep spending under control. I would like to make a proposal that is different than the usual approach but I think might  give us at least part of what we want. Remember this is only a proposal, more in the form of a thought experiment:

 My proposal. Rather than ask for a full cost of living proposal for all retirees, why not phase in the COLA. Those who retire before 65 would not receive a cost of living proposal. The rationale for this is that we are healthier than ever and most of us can continue to work, at least part time, if needed. From 65-70 there would be a COLA of 1.5 %. After the age of 70 there would be a full cost of living adjustment. My reason is that after the age of 70 health concerns might keep many from working. This proposal has two main advantages:

     1. It gives us, at least many of us, an immediate cost of living adjustment and would assure the rest of us that there would be one later.

     2. The legislature might be willing to accept this proposal as less expensive than the full cost of living  proposal usually suggested.

    Sorry for the length of this post but these are key issues for retired teachers and  those who will be retiring. Now I would dearly love your comments;

       Were you aware of the 2001 law on work after retirement and do you think changes are needed?

        Do you think my proposals for a cost of living are wise or just half witted. Do you have any suggestions?

                                    Some further comments of my own

 1. Please no political comments
 2. For those who are not teacher retirees, there will be more general blogs on retirement soon. Thanks to you all for your patience
3. The place for your comments is below. Thanks a million.            

Saturday, July 3, 2010

IN Pursuit Of Happiness

All men are endowed by their creator with certain inalienable rights, among which are life liberty and the pursuit of happinessHappiness: A Guide to Developing Life's Most Important Skill. July fourth is a propitious time to think about those rights Mr. Jefferson Thomas Jefferson - A Film by Ken Burnsclaimed on that July 4th 1776. Most of us have a pretty good idea of the meaning of life and liberty, but what about happiness; how do you pursue  happiness  and would we recognize the often elusive emotion if we caught it?

                                          Wealth and Happiness

Will money make you happy. A comedian once joked that money may not bring you happiness but it will buy anything that what will bring you happiness. A good line, but can money really buy you happiness and if so how much of  it do you need? Aristotle gave an answer many years ago that has held up quite well with time: Enough wealth is needed to provide for the needs of life but anything beyond that brings only limited satisfaction  Modern happiness surveys have confirmed Aristotle’s belief. Wealth that  allows an individual and family to escape poverty certainly can add to happiness, but beyond that, money contributes little to happiness. But is this true, that we only need enough wealth to provides for our  basic needs, such as food shelter and clothing. What if I’m happy with an  1800 square foot house but you want a 3000 square foot house? Also has modern  technology and advertising changed what we need to be happy. Could we be happy without our computers, colored televisions and mobile phones? I’m feeling unhappy just writing about it. LOL

                                           Health And Happiness

What role does good health Omron HJ-720ITC Pocket Pedometer with Advanced Omron Health Management Software play in our pursuit of happiness ?  Common sense tells us that we are happier when we are healthy. Can someone who suffers from chronic pain, for example, be happy  and if not does that again bring fourth the question of money and happiness; after all, wouldn’t one need enough money to buy the medication to manage the pain?  The good news is, that counter intuitive though it may be, studies have concluded that people undergoing even the most difficult health challenges such as dialysis and cancer can continue to be happy. Possibly the reason good health doesn’t add more to our happiness is we don’t realize what a blessing good health is till we lose it..

                                             Attitude And Happiness

 If  wealth and happiness don’t guarantee happiness, What is the key to pursuing happiness? More and more evidence is accumulating from the fields of cognitive science and neuroscience that our attitude and the way we think about life’s occurrences may play a bigger role than any other happiness factor. These factors sound an awful lot like what we were taught as children: Be  grateful for what we have, help others, look for the positive, and work to maintain our relationships with family and friends. The good news is that studies shave shown that as we age , our skills at these  simple  but vital attitudes improves, and thus  the chance for happiness actually grows . So  hopefully I haven't rambled so much I've made you unhappy! I would love to hear your comments on:

Does wealth bring happiness and if so, how much wealth do we need?

Can we be happy even in bad health?

Does happiness really matter anyway?

Looking forward to your comments below