Local Teacher Retirement Contributions Up Nearly 8% This Year
State pension contributions for school districts will increase again this year. The hike follows several years of double digit increases for districts that are already struggling with less state aide and capped property taxes.
The cost of teacher and staff pensions will increase by nearly 8 percent this year.
This is the fifth straight year that teacher retirement costs have increased. Last year those costs grew by 37%.
Pension costs have soared as the State Teacher Retirement System which has 277,000 active members and 150,000 retirees, has sought to make up from losses on Wall Street during the recession.
The rate hike comes as schools deal with restricted revenue from the state imposed property-tax cap, which holds the growth in the local tax levy to 2 percent or less. School aid from the state grew by 5 percent this year.
There is some good news, the teacher retirement system expects that contribution costs will drop next year. The recent cost increases follow several years of no increases in pension contributions when the stock market was healthy and the economy was more robust.