Page 32 Excellence In Education Lincoln Daily News January 2025 paying full attention while reading a long legal document, they may not think anything of this. It should be noted, however, that 96 months equates to 8 years, not four. This is significant for the way that the word “average” works in these two clauses. We should all know that the average of something is calculated by adding up the amounts for which one is calculating the average for, then dividing the sum by the number of amounts that were added. A smaller pool of larger numbers will always have a higher average than a larger pool of slightly smaller numbers. For example, the average of 5, 6, 7, and 8 is 6.5. The average of the numbers 1 through 8, however, is lower, with that average being 4.5. By sneakily changing the wording of how monthly retirement benefits are calculated for these two groups, they have guaranteed that, even though many Tier 2 educators will work more years over their career than Tier 1, they will receive less retirement benefits for doing so. Let’s take a look at some of these numbers in practice. Many teachers receive a 6% raise in their last four years teaching once they have put in for retirement, the percentage limit put in place by TRS before the school district must pay penalties. Since it has been established that Tier 2 educators’ retirement benefits are calculated out of their last 8 highest years, let’s assume the educator starts at $60,000 and gets three percent raises for three more years. This teacher then puts in for retirement, getting 6% raises for their last four years. First, let’s see what that would look like for the educator. Starting at $60,000, after their first 3% raise, their salary would be $61,800. After their next 3% raise, it would be $63,654, and then $65,563.62 with the raise after. At this point, the educator puts in for retirement. They then receive a 6% raise, bumping their salary up to $69,497.44. After the next year, they get $73,667.29, then $78,087.33, and finally $82,772.57 in their final year. All numbers were rounded up to the next highest penny. For a Tier 1 employee, only the last four highest amounts would be considered for their average. This means we must add $82,772.57, $78,087.33, $73,667.29, and $69,497.44, then divide by four. Adding the numbers gives us $304,024.63. After dividing by four, this would mean that, as a Tier 1 employee, this individual would receive $76,006.16 per year, or $6,333.85 per month, for the rest of their lives. For a Tier 2 employee, all 8 of these years would have to be considered, month by month. The math works out the same whether we calculate the monthly payment, add all 96 numbers up, then divide by 96 or if we just add all 8 salaries up and divide by 8. Adding all of the salaries up gives us $555,042.25. This is a larger number, but we are also dividing by a larger number. This would mean that, as a Tier 2 employee, this same exact individual would receive $69,380.29 per year, or $5,781.70 per month for the rest of their lives. This is the difference of $552.15 per month, and $6,625.87 per year. Continued --
RkJQdWJsaXNoZXIy MzExODA=