Teachers unions have shown no hesitation in selling kids down the river, including their role as the main stabilizing force behind America's current systems of de facto educational apartheid. That's hardly news. I suppose it should come as little surprise, therefore, to see the NEA move on to its next victims - and sell out its members.
"Rather than steering members toward the best retirement plans, the NEA's leadership is quietly accepting payments to endorse a low-return, high-fee plan that eats away at the savings of the nation's public schoolteachers."
Why? Money...
"Not including management fees, the NEA's only officially endorsed "retirement program" - the Security Benefit Life Insurance Corporation's Valuebuilder annuity - charges 0.9 percent to 2.6 percent a year. Throw in management fees, and the least expensive option costs a teacher 1.73 percent of her account balances each year, while the most expensive costs 4.85 percent.
Over time, a fee that large is devastating. Without inflation, the educator would have to earn nearly 5 percent each year simply not to lose money. Consider a teacher who socks away $500 a month and earns an average yearly return of 10 percent for 35 years: She'd wind up with $1,788,760 upon retirement - quite a sizeable nest egg. But if she were paying 4.85 percent in fees, she'd accumulate less than one-third as much - just $587,854.
It appears that the NEA is willing to endorse a shoddy plan in exchange for a contribution to its coffers. In 2004, the union collected nearly $50 million from the investment vehicles it endorsed."
Is anyone even slightly surprised here?
All this, too, after Attorney General Eliot Spitzer sued the benefits arm of the NY state teachers union for accepting nearly $3 million a year from an investment firm, in exchange for exclusively endorsing a high-cost retirement plan.