By Ben Martin

STRS...add an "es" to the middle of that word and you get "stress," which describes precisely what a huge percentage of part-timers feel when we think about our so-called retirement plans. Why? Because we have the cards stacked very neatly against us.  So we practice avoidance, sign on the dotted line as instructed, and bury our heads in the sands of academe. "Oh well, retirement is a long way off. Besides, I'll never understand this stuff so I won't bother about it." Sounds like some of our students. Well let me tell you, friends and colleagues, that way lies disaster.

I volunteered to write this article because … well, because I knew nothing about STRS - The State Teachers' Retirement System. Therefore I figured, who better to write it? I'd approach it as a complete novice (some other words did come to mind) and, in so doing, empathize with others in my position. You know the drill, do some research and make it simple.

Boy did I ever open a can of worms, a complex tangle of rules and regulations, that neither Administration nor Faculty can easily unknot. When I told Phil Hendricks (Payroll) of my intention to write this article, he rolled his eyes, shook his head, and groaned, "It's a nightmare."  And yet part-timers, especially, must try to make sense of it or we'll likely end up with serious problems down the road.

Check your pay stub. You'll notice money yanked out each month for "retirement." Where's it going? One thing for sure, it ain't going to Social Security. SMC doesn't contribute to Social Security; we use an alternate plan: LARISA (Los Angeles Regionalized Insurance Services Authority). Normally, when you start teaching part-time at SMC, they enroll you in LARISA by default (In certain individual cases we must join STRS rather than LARISA, but these cases represent the exception not the rule.). We do, however, have the "opportunity" to join STRS voluntarily. And therein lies the rub.

Stay with me now...STRS offers two different types of plan: the DEFINED BENEFIT PROGRAM, and the CASH BALANCE PROGRAM. And what a difference!
Under the DEFINED BENEFIT PROGRAM, we contribute about 8% of our salary, the District contributes about 8%, and the State kicks in about 5% (according to an arcane formula)*. It all adds up to a neat bundle of over 20% of our salaries each year for retirement. Pretty good, right?

Wrong! Or mostly wrong! You see, when we retire we get the money we've put into the program (plus whatever interest it's earned). but we can't touch a penny of the District or State contribution...not unless we have accrued a minimum number of years teaching credit. That's what they mean by the term "vested." and whereas a full-time faculty member earns one year's credit for every year of teaching, we part-timers have to work twice or often three times as long just to earn the same credit (they've recently made some changes in the formula, but we still can't earn teaching credit at the same rate as the full-time faculty.).

So guess what happens to the money that the District and State have contributed. Give up? Yep, it goes to paying off the full-timers. In other words, if we join the STRS DEFINED BENEFIT PROGRAM and quit or retire before "vesting," all that money goes into the pockets of our full-time colleagues. Ed Derman, Deputy Chief Executive Officer of STRS, explains: "That's how they manage to keep the program so inexpensive. If non-vested members (read: part-timers) got the District and State Contributions, the cost of the program would go way up."

Wait … it gets worse. Suppose you've managed to earn a sufficient number of years teaching credits to get the District and State contributions. Well, you'd better hope you don't also draw Social Security (like from a former job?). Because if you've also achieved eligibility for SS, the amount of money you receive from STRS diminishes your Social Security. Go figure. Let's look at the other STRS offering, the CASH BALANCE PROGRAM. No problem with "vesting" here, you're vested as soon as you join. You pay in around 4% of your salary, the District matches it. When you retire you get it … all of it. No problem with Social Security either, as far as I've managed to find out. Derman says that STRS tailored this plan especially for part timers in order to bypass that vesting obstacle.

Only one hitch: SMC doesn't offer the CASH BALANCE PROGRAM. The Part-Time Committee has suggested that our Negotiating Council raise this issue in the next contract negotiations, starting in the spring. But for now, we have a choice: LARISA or the STRS DEFINED BENEFIT PROGRAM.
Which one is right for you? Well it depends on a number of factors. Age, for one thing, and whether you figure on eventually becoming full-time (Can any of us figure on that?). If, like me, you started late, then, quite possibly, you want to avoid STRS … like the plague. And if, again like me, you wound up unthinkingly signing on the dotted line, you might want to escape. Yes, you can get out of it. And yes, there is life after STRS.
A friend of mine points out that all decisions are based on insufficient information. Clearly we need information before we can possibly know which plan best suits us.  Luckily,  we  don't face immediate deadlines. We can join STRS whenever we wish, if we wish. Maybe the administration   will  decide to offer  the  CASH BALANCE PROGRAM - or not.  Meanwhile LARISA offers a bit of protection.
Next semester The Faculty Association will try and set up a special STRS part-time workshop here at SMC. Before then you might want to attend one of the regularly scheduled STRS workshops in the area. They'll hold one in L.A. on November 4. It costs twenty bucks to register (thirty if you want to bring a guest), and it's probably worth it. Call this number: (888) 394-2060.

Hope this helps.

*"The state of California contributes an amount equal to 3.102 percent of prior calendar year member salary to pay the continuing cost of benefits to teachers. In addition, the state contributes an amount equal to 2.5 percent of the total creditable compensation paid to all CalSTRS DB Program members during the preceding calendar year for the Supplemental Benefit Maintenance Account. This is used to maintain the purchasing power of benefits at prescribed levels. the state's contributions are deposited in the Teachers' retirement fund in found equal payments each year, except for the SBMA contribution, which is made July 1"