Despite new pension law, thousands of retired California teachers are still paying for others’ mistakes

“It makes you feel helpless, and like there’s nothing you can do except pay.”

For years, the state agency in charge of teacher pensions in California has taken money from nearly 10,000 retirees after discovering that school districts — or the agency itself — had miscalculated their pension packages.

A new law signed by Gov. Gavin Newsom on September 25 expands protections for retired teachers and protects them from having to repay for those mistakes in the future. However, it does nothing for former educators who are ineligible for relief because the errors in their pensions were discovered before the bill’s cut-off date of January 20, 2023.

“We still don’t know what a solution looks like, but we’re very concerned about the issue,” Jennifer Baker, legislative advocate for the California Retired Teachers’ Association (CalRTA), said. “That is a much more complicated discussion.” And, while we’re looking into it, there are a lot of legal stumbling blocks.”

The Bay Area News Group first reported on the outrage over retired teachers’ overpayment debt in April, when it revealed that miscalculations in retired teachers’ pension packages had put thousands of former educators in debt. However, legislative efforts to protect teachers continue to fall short.

Baker stated that the new legislation, Senate Bill 432, clarifies technical issues and builds on Assembly Bill 1667, which was passed earlier this year. This was the first law to protect retirees from CalSTRS debt repayments: if a miscalculation in pension payments is discovered in January 2023 or later, AB 1667 relieves the retired teacher of the burden of repayment. Though retirees will still face reduced pensions in the future, they will not be required to repay any excess pension income they have already received. Instead, the cost will be split between the teachers’ union and CalSTRS, depending on which agency made the mistake in the first place.

“Taking care of California’s students means taking care of all the people who work in our public schools,” said SB 432 author Sen. Dave Cortese (D-San Jose). “This legislation will bolster the teaching profession during a time when it’s needed most.”

However, the new legislation will not assist teachers like Rheta Thure, whose pension miscalculations were discovered before 2023. Thure, who retired from a Salinas school in 2012 and whose pension mistakes were discovered in 2014, is still owed nearly $143,000 in “overpayment debt.”

From 2016 to 2022, 51,555 — or 5% — of the state’s retired teachers had their pension packages adjusted. The vast majority of retired educators had their pensions increased, but 9,623 had their benefits reduced. Although the average monthly reduction is $144, many teachers are seeing reductions that are ten times that amount.

According to a statement from his office, Cortese is considering how to close the loop for those who have been left behind. But, with each passing month, those retirees continue to pay for the mistakes of others.

“It makes you feel helpless, and like there’s nothing you can do except pay,” Thure said. “And of course, we pay and we pay and we pay.”

Retirees who choose to fight those decisions will incur additional financial costs. Many former educators have racked up nearly $30,000 in legal fees while fighting pension adjustments in recent years, including Thure and John Boyett, a retired teacher in Napa.

Three years after retiring in 2016, Boyett received notice that his pension had been miscalculated and that his benefits would be reduced by $1,300 per month as a result. Of that sum, $500 was applied to his “overpayment debt” of $67,000.

Boyett has been attempting to gain the right to appeal the CalSTRS decision, but he claims that even getting the preliminary hearing to do so has been nearly impossible. Over the last four years, it has been stalled, canceled, and rescheduled at least three times. CalSTRS did not respond to inquiries about SB 432 or why AB 1667 was not retroactive.

“My attorney says this is a tactic that CalSTRS uses,” Boyett said. “They try to prolong it as long as possible.” In the meantime, I’m footing the bill.”

However, he is not alone. Thure and 27 other retired teachers from Salinas sued CalSTRS for five years, winning two court cases and losing the third before the state Supreme Court declined to hear their case in March 2023. The group began with 33 teachers, but two retired teachers dropped out — and three died — before the group could reach a conclusion.

“We kind of feel like there isn’t anything else we can do without the big guns,” Sandy Uecker, who retired from her Salinas school in 2011, said. “But we haven’t been able to get anybody on board to help us.”

In an email exchange between Uecker and Rob Breyer, former president of the state’s retired teachers’ association, Breyer stated that “the most promising solution to the problem is new legislation,” and that CalRTA lacked “the clout or money to get the Legislature to act.”

“As citizens, you may contact your legislators about the problem in the hope that they will actually take action, but you can’t count on that,” Breyer wrote in an email shared with the Bay Area News Group by Uecker. “As CalRTA president, this reply is a hard one to write.”

Meanwhile, CalSTRS is the world’s largest educator-only pension fund. It is also the country’s second-largest pension fund, with a $306 billion investment portfolio.

Baker said it took nearly five years of research, coordination, and politicking to get AB 1667 on the table, with members of all parties, from CalSTRS to teachers, on board before the legislation reached Newsom’s desk. Making such a bill retroactive would necessitate not only additional costs, but also a significant amount of administrative work — most likely from both CalSTRS and school districts throughout the state.

“We’re tired,” Uecker admitted. “We’re just tired.”