EDITORIAL: How PERS eats into teacher salaries

If teachers want higher pay, they should consider how much the Public Employees’ Retirement System takes out of their checks.

The Clark County School District and Clark County Education Association remain locked in bitter negotiations. It’s proof that even a pot of gold can’t fix a broken collective bargaining system. The dispute centers on teacher pay. The district is offering an 8.5 percent increase for this year. It also wants to change the pay scale to match what’s offered in most districts, which offer higher pay for advanced degrees. Hundreds of employees would receive pay increases worth 30 percent. The biggest sticking point appears to be what happens the second year. The district has offered a 2 percent hike. The union seeks an 8 percent raise.

What’s rarely mentioned is that many district teachers started this academic year bringing home less than they did last year. That’s because the required PERS contribution increased by 3.75 percent. The district and teachers split that cost 50/50. As of July 1, teachers saw a 1.875 percent decrease in their take-home pay.

Understandably, teachers aren’t happy about this. But they shouldn’t direct their ire at the district. They should be upset at the union leaders and politicians who’ve refused to fix this broken retirement system.

The problem runs deep. The combined contribution rate for teachers is now an astounding 33.5 percent. This means that, for every three teachers, the district — read taxpayers — is paying the equivalent of four teacher salaries.

It gets worse. PERS is now using accounting gimmicks to paper over the extent of its fiscal problems. To pay its future bills, actuaries for the system believe the contribution rate for employees such as teachers should be even higher, at 37.5 percent. But PERS artificially limited the increase to avoid political scrutiny. This means the stage is already set for future rate hikes.

Undoubtedly, union leadership will then return demanding even greater pay hikes to make up for higher PERS contributions.

Here’s a better plan: Fix PERS, instead of ignoring its glaring problems. Those include overly generous benefits for career employees at the expense of shorter-tenured employees, who receive little. Its wildly inaccurate assumptions have led to this chronic underfunding. Now, current employees are seeing their take-home pay lowered to cover those mistakes. Better, more flexible options, such as hybrid plans, exist.

It should be obvious that the vast majority of teachers value spendable income today over the possibility of a gold-plated retirement only a few will enjoy. Teachers and taxpayers should demand elected officials implement a better retirement system.