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Old 07-01-2009, 03:34 PM   #21
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Not sure if it's the case today, but spikiing used to be built into many teacher union contracts in Illinois. The teacher commits to a retirement date three years ahead of time and receives large raises during each of the last three years resulting in a much larger pension than if only "normal" annual raises had been received.
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Old 07-01-2009, 03:38 PM   #22
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Not sure if it's the case today, but spikiing used to be built into many teacher union contracts in Illinois. The teacher commits to a retirement date three years ahead of time and receives large raises during each of the last three years resulting in a much larger pension than if only "normal" annual raises had been received.
I looked at the Texas Teachers Retirement System since my wife will be in it shortly. I noted something to file away for the future -- not really spiking per se, but a way to game the system similarly. It looks like she could be an aide for 15 years, work her way into a teaching position for five more years, and retire in 20 years with a pension based on entirely on teacher pay, not aide pay. (Teacher pay scale is roughly double what the aid pay scale is.)
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Old 07-01-2009, 04:31 PM   #23
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I usually avoid reading GM threads. Call me a bleeding liberal or whatever, but if “blue collar” here means assembly line, I truly feel for this guy. A childhood neighbor and his two older sons worked the American Motors assembly lines. I was close to his two younger kids so knew the family well. They appeared to be very very poor. The dad was a hard drinker who, IMO, committed suicide by automobile rather than to continue that blue collar existence. I don’t know what kind of bennies his widow inherited but she lived the rest of her life (died Mar. ’09 at 90) in that very poor manner. I never for a moment considered staying in the hometown area because I thought the job picture was too bleak.

Check out the video, “Blue Collar” which caused me to break down at the memory of those neighbors.

Think about this, you expect a guy who is exhausted by the assembly line to figure out how to maximize his investments? Think about it while being paid on a white collar j*b? or like me, at home in retirement, after many white collar jobs? BTW, I couldn’t find the part of the article that says he didn’t save a nest egg. I also had a (small) pension that was in jeopardy for a while; I worried about it, that is, agonized about it, outside of my PF.
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Old 07-01-2009, 05:40 PM   #24
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I feel sorry for anyone who has worked for a company for so many years believing in their pension system and loses . I felt sorry for all the pilots and stewardesses who lost tons of their pensions when the airlines went belly up or how about the people who saved all their lives and got swindled by Madoff or someone else .
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Old 07-02-2009, 05:39 AM   #25
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Do both of those still exist? I thought AUO was replaced by LEAP.
They both still exist. LEAP is only for 1811's and 1812's. AUO is for other law enforcement types. I hear a lot more about AUO, but I think that is because I deal mostly with the other law enforcement types not criminal investigators or game wardens.
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Old 07-02-2009, 09:00 AM   #26
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...Still, isn't $37,500 below the limits of what PBGC will cover? I'd think he's safe unless the government goes under completely.
The amount PBGC covers is reduced for early retirees. If his GM pension goes under after he turns 61 he should be covered for up to $38,880. If it goes under before that, his pension will probably be reduced: Maximum monthly guarantee tables (Although those numbers are revised every year).
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Old 07-04-2009, 11:15 AM   #27
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Spiking was a major "game" strategy in my private sector pension.
Basic pension = 1.75% x years of service x high 3.
High 3 was any, ANY, money paid to you by the company.
I spiked my salary to double.

Gimmicks used, all legal:
1. Cash out up to 240 hours of vacation per year.
2. Work (charge regardless) 15 hours OT per week.
3. File several patent applications at $500 per application.
4. Get eyes/teeth bullet-proofed then take the benefit as cash over last 3 years, $4000 per year
5. Profit sharing 2-3% of base salary in good years.
6. Hiring bonus of $10,000 for referring "cleared" persons, 1-2 per year.

The process is a pandemic of fraud, but if it's there, it will be done.
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Old 07-04-2009, 02:03 PM   #28
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My FIL retired as a salaried GM employee in 1979 and his pension (non-COLA) was $1160 a month plus $960 SS. He and my MIL lived a very modest life, with a 860sq foot house, 1 car and one vacation in 38 years of marriage. They were the typical family of the 50's with 4 kids and a SAHM. Their clothes came from garage sales and my FIl drank generic beer. When she died the had $3000 to their names. No three-legged stool there.
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Old 07-10-2009, 11:40 AM   #29
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Come to Wisconsin, home of the "amazing pensions" for teachers. 30 years service gets you a monthly payment equal to 85% of an average of your LAST 5 years of employment, plus health insurance is $50 a month until Medicare kicks in.

Plenty of early to mid 50's retired teachers living in my neighborhood.......

There is talk that the pension fund may have to lower the pension payment to 75% of your last 5 year average, since times are tough........
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Old 07-10-2009, 11:47 AM   #30
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Come to Wisconsin, home of the "amazing pensions" for teachers. 30 years service gets you a monthly payment equal to 85% of an average of your LAST 5 years of employment, plus health insurance is $50 a month until Medicare kicks in.

Plenty of early to mid 50's retired teachers living in my neighborhood.......

There is talk that the pension fund may have to lower the pension payment to 75% of your last 5 year average, since times are tough........
My wife's going to be under TRS (the Texas Teachers' Retirement System) in her new j*b, and here the formula is 2.3% per year of service based on last five years. Thirty years of service (for newer hires; as usual, people who have been there a long time get a better deal) will get you 69% of pay.

If she likes the gig, hopefully she can stick it out for 20 years until age 60, retire with her 80 points at 46% of last five years of pay. Making sure, of course, to become a full teacher and not just an aide for the last five years (based on pay scales that would nearly double her pension amount). Yeah, it's gaming the system in a way that feels unclean, but we'd be leaving a lot of money on the table by being true to our principles.
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Old 07-10-2009, 11:57 AM   #31
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My wife's going to be under TRS (the Texas Teachers' Retirement System) in her new j*b, and here the formula is 2.3% per year of service based on last five years. Thirty years of service (for newer hires; as usual, people who have been there a long time get a better deal) will get you 69% of pay.

If she likes the gig, hopefully she can stick it out for 20 years until age 60, retire with her 80 points at 46% of last five years of pay. Making sure, of course, to become a full teacher and not just an aide for the last five years (based on pay scales that would nearly double her pension amount). Yeah, it's gaming the system in a way that feels unclean, but we'd be leaving a lot of money on the table by being true to our principles.
'My advice is that if you can "work the system" in a legal manner, then work it, because the system may change.........
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Old 07-10-2009, 12:16 PM   #32
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My wife's going to be under TRS (the Texas Teachers' Retirement System) in her new j*b, and here the formula is 2.3% per year of service based on last five years. Thirty years of service (for newer hires; as usual, people who have been there a long time get a better deal) will get you 69% of pay.

If she likes the gig, hopefully she can stick it out for 20 years until age 60, retire with her 80 points at 46% of last five years of pay. Making sure, of course, to become a full teacher and not just an aide for the last five years (based on pay scales that would nearly double her pension amount). Yeah, it's gaming the system in a way that feels unclean, but we'd be leaving a lot of money on the table by being true to our principles.
Why would she wait to do whatever it takes to become a certified teacher instead of a lower paid teacher's aide? There is no upside to waiting but lots of downside.........
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Old 07-10-2009, 12:30 PM   #33
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Why would she wait to do whatever it takes to become a certified teacher instead of a lower paid teacher's aide? There is no upside to waiting but lots of downside.........
She may do it sooner than that if she likes the job and such. She already has a degree and would just need to go through alternative certification, provided there was an opening and they would take her on through that route. She could conceivably pursue certification on her own if she wants, but that might conflict with working schedules and there aren't any conventional institutions for doing that within reasonable distance.

I'm just saying that for pension purposes, for at least the last five years it would be better to be higher on the "food chain" in terms of jobs with the district. It's not like I'm going to push her into something she's not ready for or decides she doesn't want to do.
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Old 07-10-2009, 12:48 PM   #34
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Most of the problems with increased overtime and spiking during the last few years of work are problems more related to state/local systems and maybe some private firms and not the federal government. In NYC (and I'm sure elsewhere) the police and fire departments have had that situation for many years - at one time I believe the retirement amount was based on the last full year of salary prior to retirement. Now it may be another time period, but the result is the same - during that final period the employees will put in as much OT as physically possible and many can double thair salaries used in the retirement calculation.

For the average fed, whether under CSRS or FERS, this is pretty much impossible. The only way it can really be done is to move from a low cost area to a high cost one for a 3 year period prior to retirement. Not too many folks are willing to do that. You can also get promoted and remain in the new position for at least 3 years.
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Old 07-10-2009, 01:28 PM   #35
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Most of the problems with increased overtime and spiking during the last few years of work are problems more related to state/local systems and maybe some private firms and not the federal government. In NYC (and I'm sure elsewhere) the police and fire departments have had that situation for many years - at one time I believe the retirement amount was based on the last full year of salary prior to retirement. Now it may be another time period, but the result is the same - during that final period the employees will put in as much OT as physically possible and many can double thair salaries used in the retirement calculation.

For the average fed, whether under CSRS or FERS, this is pretty much impossible. The only way it can really be done is to move from a low cost area to a high cost one for a 3 year period prior to retirement. Not too many folks are willing to do that. You can also get promoted and remain in the new position for at least 3 years.
Sounds like the federal employee unions need to get on the stick! Although it may be too late....... Some states, Illinois for example, now discourage spiking provisions in union contracts by not recognizing annual raises greater than 6% during the last five years of employment unless the employer (school district, municipality, etc) pays a lump sum into the pension fund to offset the increased pension costs.
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Old 07-10-2009, 01:53 PM   #36
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She may do it sooner than that if she likes the job and such. She already has a degree and would just need to go through alternative certification, provided there was an opening and they would take her on through that route. She could conceivably pursue certification on her own if she wants, but that might conflict with working schedules and there aren't any conventional institutions for doing that within reasonable distance.

I'm just saying that for pension purposes, for at least the last five years it would be better to be higher on the "food chain" in terms of jobs with the district. It's not like I'm going to push her into something she's not ready for or decides she doesn't want to do.
OK, gotcha....... I assumed she was going to be taking the normal academic route to certification and therefore thought if she's going to invest the time and money in classes, why not do so right away and harvest the maximum benefit? I had forgotten about alternative certification as it is rarely used here in the Chicago area. In fact, it's the other way around here. Many certified teachers are working as aide's and at daycare providers, etc. because they can't find an opening in the public school system.

BTW, my oldest grandson is a special needs child due to cerebral palsy. He is assigned an aide who is with him in his third grade classroom (working under the direction of his special ed teacher). She is one very wonderful lady for whom we are thankful and have the highest regard!
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Old 07-10-2009, 02:08 PM   #37
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OK, gotcha....... I assumed she was going to be taking the normal academic route to certification and therefore thought if you're going to invest the time and money in classes, why not do so right away and harvest the maximum benefit? I had forgotten about alternative certification as it is rarely used here in the Chicago area. In fact, it's the other way around here. Many certified teachers are working as aide's and at daycare providers, etc. because they can't find an opening in the public school system.
The state of Texas is fairly aggressive with respect to helping aides become teachers. There's a program here which (within income guidelines) allows aides in Texas to attend public colleges and universities tuition-free in order to gain teacher certification.

Plus out here in the boonies, there is a relatively low percentage of people with bachelor's degrees or higher -- making the "barrier to entry" a bit lower for someone who has a degree but no teaching certificate. Having said that, my wife got the job over a candidate who was a certified teacher already. Perhaps she was rejected as being overqualified and ready to "jump ship" as soon as a suitable teaching position opened somewhere.
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Old 07-10-2009, 03:17 PM   #38
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My wife is in the Missouri teachers pension plan. In her plan it is the 3 highest years salary. The part of her health care benifits that are paid are also considered part of her salary. The plan also offered an early out with slightly lower payout for 25 years of service.

We have to pay for the medical insurance, but we are on the teachers plan and pay the same group rate.

With 27 years in she gets about 70% of her final salary. And its COLA?

But she also paid in something like 12% of her salary and the district matched that amount. She never paid into SS.
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Old 07-11-2009, 06:12 AM   #39
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Some of these teacher retirements sound extremely lucrative, until you figure that the teachers must have a degree and normally don't make top dollar. I guess it's payback for not leaving for a much better paying job.
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Old 07-11-2009, 07:26 AM   #40
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Some of these teacher retirements sound extremely lucrative, until you figure that the teachers must have a degree and normally don't make top dollar. I guess it's payback for not leaving for a much better paying job.

In many cases it's also the result of the work of the country's most powerful unions............
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