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Here’s a scenario you might not have considered: If New Jersey schools do reopen for in-school instruction this year, some unknown number of traditional district staff members may choose to retire from fear of COVID-19 contagion. Those who have worked for ten years are “vested” in the Teachers Pension and Annuity Fund (TPAF), NJ’s teacher pensions system; they can take “early retirement” and get a small pension. Those who have worked for 30 years and turn retirement age (edging up from age 60 for teachers hired before 2008 and 65 for those hired after 2011) are eligible for full pensions.
What would happen if scads of teachers gave a thumbs-down to opting into covid-era classrooms and said, “okay, I’m ready for my pension?”
You can’t blame them — it’s their money, a form of deferred compensation that averages out, according to 2016 data, to about $42,000 a year (plus a platinum-level health insurance plan). Fair and square. But those numbers add up quickly, especially when you factor in triple-dippers like Senator Nicholas Sacco, for example, who was an assistant superintendent in North Bergen, gets $190,275 a year, plus his salaries as mayor of North Bergen and state senator.
The problem, of course, is New Jersey’s budget status — $10 billion in the hole. So what would a sudden run on pension funds look like?
John Bury of BuryPensions did the calculations for us.
The latest update of active participants is through March 31, 2020 and when pared down to only TPAF members we get:
Many are eligible to retire and there might even be early retirement incentives (if the NJEA requests them) but of those who have 25 years of service there are:
- participants: 13,566
- salaries: $1,415,641,398
- estimated pensions: $779,986,203
Eight hundred million dollars. That’s real money. We may be deeper in the budget hole than originally calculated.