DECATUR Retired teachers recently got an average increase of $51 a month in benefits, thanks to a resolution passed by the Board of the Arkansas Teacher Retirement System.
The increase results from the board's voting to compound the annual cost of living adjustment for this year. The amount of the increase in the COLA will differ among individuals, depending on their final average salary and years of service. Compounding the COLA was a one-time only decision that will increase benefits to retired teachers by $19 million this fiscal year.
Current retired teachers will get an estimated $153 million in additional benefits over their lifetimes. As of late August there were 30,579 retired teachers receiving benefits from the Teacher Retirement System. They are paid $615 million a year in retirement benefits.
Last year the system had more than 70,000 active members who had not yet retired.
They are not all teachers, principals and administrators in public schools from kindergarten through grade 12.
Active members include employees of the Arkansas Activities Association, the Schools for the Deaf and the Blind, educational cooperatives, AETN, and educators at state prisons.
The average salary of active members is $32,319 a year. On average, current retirees receive $19,253 a year in benefits.
On a side note, 23 of the retired teachers in Arkansas are more than 100 years old. The oldest is 105 years old. The former teacher who has been retired the longest left the classroom in 1965, when her final average salary was $2,365 a year.
Recently, there has been publicity about socalled "double dippers" who retired from teaching, began drawing benefits and then went back to work. They now collect a salary and a retirement benefit. State law limits how much they can draw in retirement, with the limit being proportionate to how much they earn in salary at their new jobs.
It's important to keep in mind that the Arkansas Teacher Retirement System is financially sound. Theamounts of money collected by "double dippers" is extremely small compared to the total value of the system and the total amount of benefits it pays annually.
Trends in the stock market are major factors in the health of all retirement systems. Since the current fiscal year began on July 1, the Teacher Retirement System has seen very encouraging growth in its investments. Thanks to a 7 percent increase in the value of its investments, the system's assets are now worth more than $9.2 billion.
The system has diversified its investments.
Some are in stocks, some are in fixed income investments and some are in real estate.
Some investments are in foreign markets and others are in domestic markets. The purpose of diversifying is to reduce volatility in the system's return on investments.
The Arkansas Teacher Retirement System takes a conservative approach to investing.
Compared to some other public pension systems around the country, the Arkansas system is in very good financial health, especially when one considers that the stock market has been performing erratically for the past year or two.
If you have any questions or comments about legislative issues, please contact me at HendrenK@arkleg.state.
ar.us or call me at 479-787-6500, extension 30.
Opinion, Pages 5 on 09/23/2009