$10,000 Per Month

As of April 2009, the University of South Florida employed 599 people whose monthly salary was $10,000 or more.

The mean average annual wage for this group is $194,258.82, and the median average annual wage is $156,782.00. 

The highest monthly salary for this group of 599 employees was $110,429.17.  That’s correct the highest monthly salary was $110,429.17.

If you think these numbers are outrageous, remember that these are only the wages for 599 employees. Not included are perks and benefits.

The taxpayers of the State of Florida pay for the retirement of state employees (of which the University System is a participant). As of July 1, 2009 the Florida Legislature set the contribution rate for regular-class employees at 9.85%; which is the classification we will use for this example.

For illustration purposes, we will simplify the retirement formula.

Each employee is credited 1.6% per year, multiplied by the number of years worked under the Florida State Retirement System. For 30 years of employment this amounts to a 48% retirement; which is then based upon the average for the annual salary for the highest five years.

This means that the mean average pension for the highest paid 599 employees at the University of South Florida could be $93,244.23 in 2010 dollars; as much as the annual salary of a City of Tampa Police Lieutenant with nearly 30 years of service.   

While actuarial mathematicians will disagree slightly as to the amount of money necessary to guarantee the sum necessary to fund the retirement of the 599 University of South Florida employees whose monthly salary is $10,000 or more, for broad mortality illustration purposes with the conditions set forth thus far, it will take approximately $2 million in a trust fund to generate $93,000 annually for the life expectancy of a fairly young public service employee. 

This means that the taxpayers of the State of Florida must have a minimum of $1.24 billion dollars set aside for these 599 employees alone in the State Retirement System.

The Florida State Retirement system currently provides retirement, disability, or death benefits to approximately 300,000 people plus 33,000 Deferred Retirement Option Program (DROP) participants.  As of June 30, 2009, there are 668,416 non-retired employee members of the Florida State Retirement System, and the trust fund has a valuation of $115.2 billion; an amount equal to the net asset level of 2004.

From 2004 through 2009, total annual funding for the State Retirement System has increased from less than $2 billion to nearly $3.4 billion; however, the account balance for the state's retirement funds dropped to $96.8 billion in 2009, from $124.8 billion in 2008.  After all additions and deductions, the retirement trust funds decreased in value by $27,963,638,504 ($27.9 billion).   With a decrease of 4.42% in value in 2008 and a 19.03% decrease in 2009, the funds must annually gain approximately 24% in 2010 and 2011 to return to the 2007 end of year funding levels.  Without taking into consideration contributions, if all funding and hiring was frozen, normal rates-of-return for moderate investment risk means that a return to year-end 2007 funding could easily take until 2017 or beyond. 

According to the actuarial calculations of those retained by the Florida State Retirement System, the unfunded liability of the system is increasing due to an increase in the number of retirees, higher salaries, and annual cost-of-living increases.  Not mentioned, but very obvious, is the significant investment loss as a result of risky real estate purchases that the plan trustees (Governor, Attorney General, and Chief Financial Officer) have been criticized for by a few media outlets. One boondoggle housing investment alone in New York City lost the taxpayers of the State of Florida over half a billion dollars. And while speaking of New York, it would be worth everyone’s while to see the amount of political contributions part-time Governor and full-time United States Senate Candidate Charlie Crist has received from New York, their occupations, investment holdings, and who their employers are.  Where there’s smoke there’s fire folks.

Although the Florida State Retirement System Pension Plan won a Public Pension Standards Award for Funding and Administration in 2009, the fact remains that the taxpayers are paying a fortune to an elite group of state employees and that the overall cost to the taxpayers is astounding. It is also important to remember that the University of South Florida is only one of many employers covered under the Florida State Retirement System with elite salaries. 

When one State University employs 599 people whose mean average annual wage is $194,000, does $115 billion sound like it is sufficient to pay all of the current and future obligations for the remaining 667,817 employees and 333,000 current retirees?

Now consider that the average annual salary for an employee covered under the Florida State Retirement System in 2009 was $41,572, the per capita income in Florida was $27,151, and the median household income was $48,637, the word “elite” takes on a rather elite meaning. 

The attention spent on the fiscal issues in Washington consumes a tremendous amount of the mainstream media’s time. The same is true for many who are upset with taxes, government growth, and deficits. Unfortunately, many national spending and funding issues are difficult to change without a massive and fundamental shift in the electorate; which may be occurring at this time.  But if more attention was focused on local and state issues by candidates who sought office with the goal of eliminating waste rather than providing more in order to curry voter favor and lobbyist funding, the collective We the People, would be far better off.

Just think about what we started off with again.  599 people working for one state employer whose monthly salary is a minimum of $10,000.00 and whose mean average annual salary is $194,258.82 for a total annual salary is nearly $117 million. 

Utterly Amazing Isn’t It

Source: Wall Street Journal (February 22, 2010)

School reformers generally agree that the most important education resource is the teacher. But one of the biggest obstacles to putting a good instructor in every classroom is a tenure system that forces principals to hire and retain teachers based on seniority instead of performance.

California grants tenure to teachers after merely two years in the classroom. New York, like most other states, makes teachers wait a grand total of three years before giving them a job for life. In most cases tenure is granted automatically unless administrators object, which is rare.

What was Albert Einstein paid and could we afford him today?

Elite Public Service - A Path to Millionaire Status