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FINANCIAL SECURITY
It 's an understatement to say that teachers have never made a lot of money and probably never will, but one thing we can be thankful for is a degree of financial security because of our defined benefit retirement plan. This year we received a 3.85% COLA (cost of living adjustment) in August because it is based on the CPI (Consumer Price Index).
With inflation now the highest it has been in decades, we are likely to have another
handsome increase next August. We are concerned for teachers hired after 2014 who are under the hybrid plan. Instead of contributing 5% of their salary to this plan, as we did, they contribute 4% to the defined benefit and 1% to a defined contribution plan that works like a 401K and is subject to the fluctuations of the stock market.
Those teachers are encouraged to voluntarily contribute more to this part of the plan in order to receive a benefit comparable to ours, even when times are good, but with the volatility of the stock market, they are bearing serious economic risk. Even with the raises they are receiving, they lack the discretionary income to save more of their earnings.
Patricia Bishop, Director of VRS is likely to deal with this issue and the soundness of our retirement system in her presentation at the state meeting Wednesday, October 19 at 9:00 a.m.
Be sure not to miss this.
We thank Troilen Seward, a retired teacher and superintendent, for representing us so well on the VRS Board for the last eight years. A conflict prevents her from being with us at our October meeting, but we hope to see her in the spring since she is a VRTA member. Recently , the Joint Rules Committee appointed Lindsey K. Pantele to the four- year term of teacher representative on the board. Ms. Pantele currently teaches English and Foundations of Teaching at Glen Allen High School. She was named Henrico County Public Schools' Teacher of the Year in 2020, in addition to her other awards recognizing her excellence in teaching. We look forward to meeting her, but it is unlikely she will be able to join us at our meeting because of her school responsibilities.
Another piece of our financial security is Social Security, a federal program and benefit that education retirees in fifteen other states do not have. Like VRS, this is also a defined benefit that grants a COLA by law every year. Since this is based on a different factor of the CPI, that percentage is not always the same as that for VRS, and VRS does have a cap on the COLA, which Social Security doesn't have.
According to an article in the Richmond Times Dispatch by Georgina Tzanetos of Bankrate.com, August 24, 2022, the Social Security COLA for 2023 will be based on the third-quarter data from the CPI - W (for Urban Wage Earners and Clerical Workers). Mary Johnson, Social Security and Medicare policy analyst for senior advocacy group the Senior Citizens League, says the announcement of that COLA is expected in the middle of October. She predicts that, based on inflation, the COLA could be as high a 9.3% to 10.1%. This year's COLA was 5.9%
Remember, what the government gives the government can take away, regardless of whether it's a state or federal benefit. Over the last several years, the GA has followed our requests to make up for its past underfunding of VRS and to follow the actuary's recommended contribution rates. However, there are those in the federal government who still are making noise about privatizing Social Security and refusing to take seriously sensible measures to make it more financially secure. We must vote on November 8 with these benefits in mind. Remember how hard we worked for them in the past and how easily we could lose them. Remember the effects other legislation has had on lives of people in the past. Based on what candidates are saying and the past performance of incumbents, think about the effects of possible future legislation.
Don't let the busyness of life be so overwhelming that voting gets lost in the shuffle.
A vote is a terrible thing to waste!
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