re: 25% of the LA school budget goes to pensions.

quote:

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That’s not how it works. In essence, the amount paid in over a 40 year career would be used up in about 2 years give or take

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uh, teacher's money is invested for them. Just like any other retirement account. It doesn't go into the state budget. So 40+ years generates a shite ton of interest. It generally takes 12 years to withdraw just the money the retiree put in. On top of that is the states matching portion, with interest. The retirement fund currently has $27,191,000,000 in assets.

The budget shortfall comes from an estimate of everyone working 40 years and retiring at max benefits, for X number of years after. That doesn't happen.

When people die, they are only refunded the portion they paid. Not with interest. Many retire with less than max benefits. Some go back to work, which stops their benefit, and they begin paying again. So the debt is just worst case scenario, based on the legislature not giving the entire matching portion each year.

Find an investment calculator. Start with $600, and add $600 monthly (a teacher and states portion of an average salary today) over 40 years. Even at 6% over those 40 years, a teacher will have $1.2M in retirement benefits. And that keeps generating interest, even after they die.