We often hear about the wonderful benefits that the UFT provides us. Premium-free healthcare, a pre-tax voluntary retirement plan that includes a 7% Fixed Return option, and a democratic union that values member voice. While we should appreciate all of that, one point of concern is that when we express our displeasure with something, we are often told to compare what we have to other occupations, and that we should basically consider ourselves fortunate. This is a passive-aggressive way to brush members’ issues to the side without having to take accountability or work to alleviate the problems impacting our union. It’s also irrational to ask us to compare our circumstances to those in other fields because it implies that the barometer of our contentment isn’t the trajectory in which we’re headed, but whether or not we’re doing “better” than others. The only true way to gauge our situation is to see if our benefits have improved or declined over the years.
TDA Fixed Return
Currently (since 2009): 7%
What is used to be: 8.25%
How we got here: Michael Mulgrew’s mentor, Randi Weingarten, served as UFT President for 11 years, from 1998-2009, before stepping down to become President of the American Federation of Teachers (AFT). One of her last acts as the leader of our union was something that would irreparably harm our retirement savings - she agreed to lower the TDA Fixed Return interest rate from 8.25% to 7% in exchange for adding the two days prior to Labor Day to our summer vacation. It’s a move that has literally cost us billions of dollars. You know who still receives 8.25%? Everyone else. CSA (admin’s union), PSC (CUNY faculty and staff), you name it.
It’s hard to imagine exactly how much money this drains from our retirement. After all, it’s only 1.25%, how much can it hurt? Well, let’s see…
Admittedly, the numbers and calculations below are crude, but they will give you some idea of just how much money we’re missing out on.
Example 1: Person A invests $2,000 per year in Fixed Return for 30 years at the original rate of 8.25%. Person B invests $2,000 per year in Fixed Return for 30 years at the current rate of 7%.
Person A walks away with $237K at retirement. Person B about $189K. Total difference: about $48,000. Let’s escalate this a bit…
Example 2: Person A invests $5,000 per year in Fixed Return for 30 years at the original rate of 8.25%. Person B invests $5,000 per year in Fixed Return for 30 years at the current rate of 7%.
Person A walks away with nearly $600K at retirement. Person B $472K. Total difference: about $121,000. It gets worse…
Example 3: Same scenario, only this time Person A invests $10,000 per year in a Fixed Return for 30 years at the 8.25% rate. Person B invests the same amount for the same time period at a rate of 7%.
Person A walks away with close to $1.2 million. Person B comes up over $50K short of a mil. Total difference: About $242,000. It gets even worse…
Example 4: Last one. Let’s do the same calculations assuming Person A and Person B invest $20K per year over 30 years at the 8.25% and 7% Fixed Return rates…
Person A walks away with just under $2.4 million at the 8.25% rate. Person B comes up just short of $1.9 million. Total difference: $493,000. Read that number again. I’ll give you time as you dry heave in the corner.
When people tell you that we’re lucky to have a 7% Fixed Return option because very few others do, technically they’re not wrong. However, the barometer of self-improvement isn’t measured by comparing ourselves to others; it should be by comparing ourselves to who we were yesterday. We were a lot wealthier yesterday. The idea is to improve things as time goes on, not make things worse.
Healthcare
Currently: Medicare (GHI-CBP being the most popular choice among teachers)
What it soon will be: Aetna or Emblem/United
How we got here: The year is 2014. Michael Mulgrew desperately needs a win after being unable to secure a contract for years under the tyrannical Michael Bloomberg. Mulgrew nets the teachers an okay (at best) contract but under one condition - we must pay for our own raises by giving up $1 billion from our Health Stabilization Fund (2014 Contract, page 12). The Health Stabilization Fund has two main functions - it gives us added benefits and, the biggie, it helps prevent us from paying premiums if our health insurance gets too expensive.
As if that weren’t bad enough, Mulgrew and the Municipal Labor Committee (more on them in the future) doubled down in 2018, agreeing to pay the city $600 million per year in perpetuity to pay for our raises.
Where did Mulgrew plan on getting that money from? The retirees, of course. After decades of laboring in classrooms and dutifully serving the community, Mulgrew was going to force retirees into an inferior, privatized healthcare plan (Medicare Advantage) in order to cover the $600 mil. Unfortunately for him, the retirees have been fighting back and have won (for the time being) over and over again in court to retain their healthcare.
This is all good news but there’s one problem: we still owe the city the $600 million/year. That’s where our new health insurance carriers come into play. We will soon be waving goodbye to traditional Medicare (GHI-CBP for most members) and welcoming in privatized health insurance through Aetna or Emblem/United. What does this mean for us? The possibility of tiered hospital costs (better hospitals will cost more money), higher copays, higher deductibles, narrower networks, and prior approval. No longer will we be able to simply get that surgery or those drugs that our doctor prescribes - we will have to wait and hope our health insurance carrier decides to approve the care that we need. As most of us learned when following the Luigi Mangione case, private health insurance companies make money by delaying and denying care.
Don’t be fooled by people who tell you we are fortunate to have premium-free healthcare at all. We signed up for this job with the understanding that we would be afforded traditional Medicare. This downgrade is going to (possibly literally) kill us.
Democracy
Currently (since 2002): District Representatives are chosen by the UFT President.
What it used to be: Chapter leaders elected District Representatives.
How we got here: This one is pretty cut and dry. For years, district representatives were elected by chapter leaders. Granted, most chapter leaders have traditionally been Unity members, so the outcomes were rather predictable for the most part, but at least there was some form of democracy involved. In 2002, it was decided that loyalty was more important than accountability and autonomy. District reps have been selected by the UFT president ever since.
District reps are incredibly vital, as they are the go-to person for every chapter leader. A good district rep can be an invaluable resource and a priceless commodity. On the other hand, a disinterested, neglectful district rep can completely hamstring the members under their watch. While bringing back elections for DRs may not be a full-proof solution, it does put the pressure on them to do right by their constituents.
We have retirement benefits, premium-free healthcare, and a union that ostensibly protects us, which is more than what many others can claim, but that doesn’t mean we should sit quietly while these pillars crumble around us. Other occupations may not be as fortunate as we are, but comparing ourselves to them is like comparing apples and oranges. We need to look back and evaluate whether or not things are improving. The evidence, unfortunately, only points in one direction.