Unfunded Teacher Pensions - West Virginia

Jan 18, 2008 - Unfunded Pensions continued from here.

The West Virginia Supreme Court let stand a lower court decision that determined that the West Virginia legislature's attempt to merge two pension plans to help bail out their troubled pension problems was unconsitutional.

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BACKGROUND Three years ago Legislators in West Virginia passed a law to merge two teacher retirement funds. Legislators authorized the merger in response to a projected shortfall of several billion dollars in teacher pensions. Circuit Judge Paul Zakaib ruled that it was unconstitutional to take the individual retirement accounts of teachers in one retirement plan and roll them into the State Teachers' Retirement System (STRS).

Defined contributions and variable benefits
A 401(k) plan traditionally works on the principle of defined contributions by both the employee and the employer. The combined money is invested, with the employee making the investment decisions. The account is private property. In most instances, the employee can withdraw money from the plan for emergencies and the money belongs to the retiree and their beneficiaries. The retirement benefits are variable, depending upon how well the investments do.

Defined benefits
What the defined-benefit plan is a future promise of payment to retirees, irregardless of the monetary contributions made by the teacher and irrespective of the fact that the state never actually contributed their share. In effect, it's an obligation to pay a teacher a percentage of their salary for life, complete with periodic increases, with money from future tax revenues. In other words, it's political generosity and the taxpayer's burden. That's the state system. [In contrast, Social Security is paid on the basis of employee and employer contributions.]

Unfunded Pensions
While retirement funds across the country are largely unfunded, (See Pew Study Finds States Face $2.73 Trillion Bill for Retiree Benefits) West Virginia's teacher retirement defined-benefit plan (state-run plan) has been called the worst-funded pension plan in the nation. The Pew study says that when it comes to pension funding levels, West Virginia—with about 55% of its aggregate pension obligations covered—lags behind every other state.

West Virginia's actuarial funding ratio is only 22%. The fund has only $1.4 billion in assets with actuarial liabilities of over $6 billion. (Source: "Public pensions in the Midwest," Rick Mattoon, Senior Economist and Economic Advisor, Federal Reserve Bank of Chicago. Link )

Fixing the Problem
Attempts to fix the problem have been sporadic.

West Virginia received $804 million from tobacco securitization. (Selling all future tobacco settlement income to investors for a much smaller one-time lump-sum payment.) The $804 million was supposed to have assured the stability of the teachers pension fund.

In 2005, voters rejected the Governor's plan to approve a $5.5 billion bond to repair the pension system. In an Associated Press story of voter rejection of the bond issue, there was this:

The funding shortfall for the teachers’ program, which has 45,363 enrollees, is one of the worst among public plans nationwide. Responsible for about $5 billion of West Virginia ’s unfunded pension liabilities, it owes $3.50 in promised benefits for every dollar it has on hand.

"For West Virginia and 12 other states, unfunded pension liabilities exceed their general revenue budgets. "

The Reason Foundation on the need for reform in West Virginia.

With taxpayers across the country facing the daunting likelihood that they’ll be required to bailout government pension systems a new Reason Foundation study urges all governments to shift new employees to 401(k)-style defined-contribution plans and to pass laws requiring voter approval for any future benefit increases. The study concludes that traditional government retirement plans encourage irresponsible decision-making and chronic under-funding, allowing politicians to curry favor with unions by doling out excessive benefit increases at taxpayer expense.

A summary of their study, The Gathering Pension Storm: How Government Pension Plans are Breaking the Bank and Strategies for Reform, is available here.
The full study is available online.

Pew summary of pensions in West Virginia. State fact sheet.
(You can find links to fact sheets for every state in their press release. Scroll to bottom.)

JUST THE BEGINNING
Unfunded pensions are only one part of the problem. States have unfunded "other benefits" for health care. It wasn't until 2007 that West Virginia established an irrevocable trust in 2007 in which to actually set aside assets for funding those benefits. The Pew Trust estimates that West Virginia's unfunded promise for "other benefits" is $3.4 billion. Not a dime of which was funded up until to 2006.

Search "pensions" or "unfunded pensions" or click on category pensions for previous TT coverage.

Preuss School

Continued from here.

When we read about Preuss School, we wanted to know more. The article suggests that standardized testing is to blame and that competition for grades was the main culprit, leading many educators to cheat. What we found is that cheating benefits only the educator, not children, and it is the educator's reputation that is the "high stakes" in testing.

THE SCHOOL
From the Preuss web site: Preuss is a charter school that prepares low-income and minority students for college. It is jointly chartered by the University of California San Diego (UCSD) and the San Diego School District and relies heavily on UCSD students as tutors. It is unusual because it receives funding from the state.

The school is located on the University of California San Diego (UCSD) campus in La Jolla, California. One admission requirement is that parents or guardians should not have a college degree, making the student the first one to attend and graduate college.

The student body is 59% Hispanic, 12% African American, 23% Asian/Indo-Chinese and 6% Caucasian. Besides longer school hours and days, the school has nearly 10,000 hours of increased instruction time.

PURPOSE
From the school web site:

"

As part of UCSD, a major research institution, The Preuss School also serves as a model school to study and develop best practices in the preparation of low-income, urban students for college admission to be disseminated to improve public education." HIGHLY RANKED in 2007.
The school ranked 10th out of 18,000 U.S. high schools in new rankings by U.S. News & World Report. link

Preuss ranked second in the USA among charter high schools.

Last May, Preuss ranked 9th among 1,200 high schools deemed the nation's best by Newsweek. link

It’s very unusual for a school to make its first appearance at the top of the rankings, Newsweek’s Contributing Editor Jay Matthews told Alvarez. But college preparation, and specifically Advanced Placement classes, is a critical part of Preuss’ curriculum, Alvarez said.

THE AUDIT An audit last month by a security firm found that 75.8% of transcripts reviewed had "one or more grades inaccurately reflected in student transcripts" or discrepancies between grades posted to electronic grade tables and student transcripts. The audit found that Alvarez and a counselor "likely had knowledge of and/or directed inappropriate grade changes."

From the school web site: [bolding ours] " ... auditors found 427 instances of incorrect grade recording. Out of the 190 transcripts examined in the audit, 144 (75%) included one or more incorrect grades. The Preuss School lacked the necessary background documentation of grade changes. At no time during this review were students found to be involved."

THE FULL AUDIT The full audit. (pdf)
One new policy to be implemented was Preuss School training and staff development activities will include an annual session specific to ethics, and personal rights and responsibilities for all staff. (pg v)

As far as learning goes, there is this.

[Audit & Management Audit Service] (AMAS) [the auditing firm] compared the average passing rates of AP exams for all students in California from school years 2002 through 2007, with the pass rates for Preuss School students for the same subjects and same years.

We noted that the percentage of Preuss School students who passed AP exams with a score of 3 or higher was significantly lower than the State average in most subjects. The only subjects where Preuss School student passed at a rate near or above the State passing rate on a consistent basis were Spanish Language and Spanish Literature.

TT - We're not sure what that says about the effectiveness of the Preuss program of educating urban students, but it does suggest that language is a major barrier, more so than poverty.

There are a couple of lessons here. One, it's probably better not choose a school based upon supermarket magazine ratings. And, second, cheating children out of a decent education by pretending they have achieved something they haven't, is unethical and immoral. It serves only to allow educators to congratulate themselves on a job not done.

Social promotion demeans and degrades the student, discredits education, and demoralizes parents who have higher hopes for their children.

Michigan - Criminalize Teacher-Student Sex

750.520d Criminal sexual conduct in the third degree; felony.

(1) A person is guilty of criminal sexual conduct in the third degree if the person engages in sexual penetration with another person and if any of the following circumstances exist:

(e) That other person is at least 16 years of age but less than 18 years of age and a student at a public or nonpublic school, and the actor is a teacher, substitute teacher, or administrator of that public or nonpublic school. This subdivision does not apply if the other person is emancipated or if both persons are lawfully married to each other at the time of the alleged violation.

Source: Michigan Legislature Link

(Continued from TT Blog) Carrie McCandless Link


Update Nov 14 - "The school board president, David Mundy, is also being charged with failure to report and tampering with a witness or victim. The president apparently knew about the alleged incident but didn't report it to police until two weeks later. State law requires school officials to report allegations of child abuse or neglect to police immediately."

Update Nov 2 - David Mundy, school board president, resigned.

Update Dec 4 - Brighton school promises to quickly report future incidents.

Update Dec 5 - Mundy's letter of resignation. He painted the building and cut the grass.

Update Jan 23, 2007 - McCandless appeared for a preliminary hearing. The boy was also in the courtroom as McCandless attorney had subpoenaed the boy to appear in court.

Update Jan 29 - A new arrest warrant has been issued for McCandless after prosecutors alleged that she contacted the victim in her sexual assault case.

Update Mar 13 - Tommy Clay says he offered to "take the fall" at first for his teacher when the student’s sexual relationship with Carrie McCandless was reported to her husband, Chris McCandless, the principal of Brighton Charter High School.

But he and his family changed their mind when the charter school board’s president, David Mundy, asked him to leave the school and tried to cover up the incident, Clay, now 18, told Matt Lauer this morning on The Today Show.

Mundy trial scheduled for Jul 23. Link to Mundy

Update Apr 24 - After pleading guilty today to the felonies of tampering with physical evidence and contributing to the delinquency of a minor, McCandless received a deferred sentence today on two felonies. The judge then scheduled a sentencing hearing for the misdemeanor on June 8.

Under the terms of her plea agreement, McCandless can be sentenced to a maximum of 45 days in county jail and five years' probation. She isn't expected to serve any time. She also must register as a sex offender but only for 10 years because the sex charge is a misdemeanor

Durham, NORTH CAROLINA

[Continued from TT blog.]

Mar 26, 2007 - An 8th-grade teacher received deferrent prosecution on two counts of contributing to the delinquency of a minor.
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"With deferred prosecution, she received no punishment and will have a clean record if she behaves for the foreseeable future. The incident only came to light when the boy's father launched a complaint against Briggs. She then resigned as a teacher."

The teacher and boy deny they had sex, but an investigator quoted in the article thinks otherwise.

Newspaper also notes that criminal charges are pending in Durham against at least two other former teachers: Eric Grange and Grant Rockett.

TT - While the teacher might not be able to teach in North Carolina again -- and that's not entirely certain from the article -- the lack of a criminal record means the guilty plea will not show up on future background checks conducted by other schools in other states.

Florence, ALABAMA

Continued from TT blog.

Mar 25, 2007 - A student teacher at Wilson High School has been banned from the school after he was accused of e-mailing and posting inappropriate messages to students online.
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Parents found an inappropriate conversation on the Internet through MySpace between the intern and their daughter. "It-wasn't pornographic, but suggestive and very uncomfortable." The school superintendent said Valentine would not give details of the e-mails but said they indicated "a relationship was being-cultivated."

The school is reviewing their intern placement policies. Typically, local schools accept student teachers based on a college recommendation. The intern has been placed in an internship in another school district and is scheduled to graduate in May, upon completion of his internship. The teacher said the only thing he's guilty of is a lapse in judgement.

Source: TimesDaily.com - a New York Times-owned newspaper.

TT - A Falmouth, Massachusetts special education teacher was fired in January after a parent brought copies of his MySpace page to the attention of school authorities. See MySpace labels.

A number of schools are thinking of ways to implement a policy that would define professional standards of conduct for teachers who have pages in social networking sites. Since the teacher maintains the sites primarily to keep in contact with students, it is of concern to school authorities and parents.

Camden, NEW JERSEY

Mar 20, 2007 - Continued from TT blog.

Michael Hailey, 65, former principal at at H.B. Wilson Elementary, was indicted, along with his top aide, administrator Patricia Johnson, 57, charged with conspiracy, theft, official misconduct and record tampering.

Another former elementary school principal, Juanita Worthy, 59, of U.S. Wiggins Elementary School and her daughter, Keah Worthy, 31, a former teacher at Wilson, are also accused with Hailey and Johnson of overbilling the district more than $25,000 dollars for leadership meetings that never occurred.

Hailey's attorney predicts more people will be indicted in the scheme.

The two principals and Johnson were suspended with pay last May after a school board investigation into the meeting vouchers. They retired in July while facing district disciplinary action. Keah Worthy no longer works for the district.

According to census data, Camden is the nation's most impoverished city, with a median household income of just $18,000. The city of 80,000 sits across the Delaware River from Philadelphia .

Bloomberg News covers the story.
The case is State of New Jersey v. Michael Hailey, Patricia Johnson, Juanita Worthy, Keah Worthy, 07-03-00021-S, Superior Court of New Jersey (Trenton).