Rich DeColibus: Where's the beef?

Rich DeColibus to Mario Iacone, January 3, 2010
Subject: Media Attack

Hi Mario,

My 32-bit QBasic program won't run on my 64-bit computer so I'm hoping you've got functioning primitive progamming ability. The newspapers in Ohio have launched a concerted attack on public pension plans and the best response is facts and figures. More to the point, social security taxes are 6.2% (there's also a 1.46% Medicare tax, but everyone pays that so there's no difference) while teachers pay 10% to STRS. The relevant question, I believe, is how much will the 3.8% difference generate over a lifetime of work (say 35 years). Obviously, what salary assumption you make will make a huge difference in the final answer so I would suggest (if you can do this easily) three averages of $30k, $45k, and $60k with an average rate of return of 5% compounded. The goal is to prove teachers have funded their own retirements by paying a significantly greater percent of their salary over their lifetimes.

(Click image to enlarge)

On a little sidebar in my paper (the Plain Dealer), Nash from the Dispatch noted the average government retiree in Ohio receives $25,763, while the average private sector individual gets $13,326 from pensions and annuities and $12,699 from social security, for a total of $26,025. Let's see now, in the old math $25,763 was less than $26,025. Hmmm. Where's the beef? Teachers do better, of course, because we pay more every month of the year, year after year.

Rich D.