Financial future worries retired teachersApril 25, 2013
By CLAIRE MOORMAN
Herald Staff Writer
Local retired teachers are concerned about their financial futures as the Indiana Retired Teachers Association continues to fight for pension increases.
Rick Smith, 65, a member and past president of the Dubois County Retired Teachers Association, says if nothing changes in the Legislature to adjust the incomes of retired teachers, it will not be long before all former educators younger than 70 begin to face financial hardship.
Indiana Retired Teachers Association Executive Director Nancy Tolson, who visited the Dubois County chapter last week, said her organization lobbies for cost-of-living adjustments for retired educators, though the effort has not been successful for several years.
“We have not had (a cost-of-living adjustment). This will be the fifth year, because we’re not going to get one again this year. It’s pretty evident,” Tolson said. “We understand that things have been tough for the last few years, but it’s also true that inflation has increased over 6 percent at least.
That means we have lost that much in purchasing power, and if things went on for many, many years, the pensions that we get wouldn’t be worth very much because inflation eats that up.”
Smith, who retired from teaching science at Jasper Middle School eight years ago, said he is concerned that the lack of an increase to retired teachers’ monthly payments will soon catch up with him and his retired-teacher friends.
“It will have an impact. If you’re not getting a cost-of-living increase, then at some point in time, you’re still making the same amount of money as you did five, eight, 10 years ago,” he said. “If you go to the gas pumps or the supermarkets, you know that food doesn’t stand still, you know that gas isn’t standing still. If you own a home you know that your real estate taxes aren’t standing still. I think my taxes this year went up probably 5 percent.”
Tolson said that to make up for the lack of a cost-of-living adjustment, the Legislature now offers a stipend known as the “13th check,” which adds a one-time payment to a retired teacher’s pension each year, as long as that teacher worked in schools for at least 10 years.
“They’ve given us that for the past five years, and we are very grateful for that,” Tolson said, but she added that the extra check will not be enough to offset inflation for seniors. Unlike a cost-of-living adjustment, the 13th check does not increase the base pension payment for the following year.
For some teachers who retired before 1980, the monthly pension check is less than $500, something that Tolson is working hard to change. Smith said he doesn’t personally know whether any local teachers fall into this category, but he estimated that there could be up to eight older retired teachers affected in the county.
Huntingburg resident Greta Patberg, 70, who also retired eight years ago from teaching first grade at Huntingburg Elementary School, estimates she has only about seven years left before the financial strain hits. She is hopeful that Tolson’s organization will secure better payments as she gets older.
“You don’t ever want to put yourself in that position. You want to keep your income up so it meets the demands of living,” she said. “That’s a good thing that it (the Indiana Retired Teachers Association) is active. It’s good that we have people at that level who will listen and be advocates for us.”
Tolson said that part of the trouble with low teacher pensions is that the pre-1996 fund, which includes those who began their careers before 1996, is underfunded because of a pay-as-you-go design initiated in the 1920s. She wants to encourage lawmakers not to be fearful of increasing benefits for older educators because of the benefits it would have for their local communities.
“Most of the money that they send us in pensions through the teacher retirement funds goes right back into the community and is spent at the drug stores, the grocery stores, the doctors, the dentists, the gas stations,” she said. “We just want to help them ... to have a little bit more purchasing power.”
Even if the Legislature continues to deny payment increases, Tolson said she is still confident that retired teachers will remain active in their communities. Together, Indiana’s former educators have contributed more than 1 million hours in volunteer time each year for the past seven years, she said.
“I think even if we never got anything more, teachers would still be volunteering,” Tolson said. “I think they do it for the love.”
Contact Claire Moorman at email@example.com.
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