Kenneth Murphy and Alice Jordon are about the same age, worked long careers in their chosen fields and retired on roughly similar incomes.
But that’s about where the similarity stops. Their differences illustrate the growing divide between retirees in the public and private sectors.
Jordon, 61, was in her mid-50s when she retired after 31 years in DeKalb County schools. She worries that younger teachers won’t enjoy an equally secure retirement because of pay cuts, furloughs and growing pressure to trim public employees’ pension benefits.
“I think most educators are very underpaid for what they do, all the hours, just like firemen and policemen,” said Jordon, of McDonough.
Murphy, 64, on the other hand, thinks state and local employees’ pensions and pay are out of control and need to be cut — even if state and local governments have to file bankruptcy to do it.
“What they get on their retirement, it’s unreal,” said Murphy, who retired four years ago from his air cargo job at Delta Air Lines. “I think every pension plan, state and local, needs to be looked at.”
Former House Speaker Newt Gingrich, a possible GOP presidential candidate, recently proposed that federal law be changed to enable states to file bankruptcy so they can shed their pension obligations. But critics of the proposal counter that, without their pensions, public-sector retirees wouldn’t have a safety net since many aren’t part of the Social Security system. Private-sector pensions also are guaranteed up to certain levels by the Pension Benefit Guaranty Corp., a federal agency. Public-sector pensions are not.
Such talk worries Jordon.
“It concerns me a great deal,” she said of proposals to allow states to renege on their pension obligations. “Without a pension, we would have nothing.”
A look at the ups and downs of Jordon’s and Murphy’s careers — and their plans for retirement — sheds a personal light on the growing debate over public employees’ retirement systems.
‘I put a lot of money away’
Kenneth Murphy said he and his wife, Mary, are comfortably retired on about $42,000 a year, roughly 60 percent of their previous incomes. Also, his wife, who likewise was employed at several airlines, sometimes works part time as a flight attendant on corporate jets.
“I’m not on food stamps,” he said.
But that might have seemed a likely fate at times during his 36-year career at five airlines, including Eastern, Continental and Delta. Four carriers, including those three, filed bankruptcy. Eastern failed.
The Murphys’ retirement income is cobbled together from Social Security, savings, rental income, a small pension and cash severance payment from Delta, settlements from Eastern’s bankruptcy case, and pension payments from the PBGC, which took over Eastern’s pension plan.
In 1972, however, Murphy wasn’t thinking much about retirement when he hired on with Eastern as a cargo handler in Boston. Soon, he moved to Atlanta, where he eventually supervised crews of fuelers and aircraft cleaners for Eastern.
Murphy had worked there for almost 20 years when Eastern filed bankruptcy and, in 1991, shut down. He said he’d known for some time that the airline was in trouble. “I knew the party was over, so I put a lot of money away,” he said.
He started saving a good chunk of his pay in retirement accounts and stock investments nearly 30 years ago, Murphy said. The Murphys now get about a third of their retirement income from those investments.
After Eastern, Murphy went to work for a few years at Continental Airlines, which filed bankruptcy in 1990, and then got the cargo job at Delta.
By the time he retired in 2006, Delta had also filed bankruptcy. The airline dumped its pilots’ pension plan on the PBGC during the bankruptcy reorganization but retained pensions for other employees.
At 59, Murphy took an early retirement buyout offer from Delta, which was restructuring and shedding employees. He said he retired because he needed to help his aging father and his brother, a Vietnam veteran who suffers from schizophrenia and other issues.
“This is my brother. I can’t kick him to the side of the road,” Murphy said. “He would be dead.”
From his experience with the airlines, Murphy believes tough cost-cutting, consolidation and even bankruptcy can result in healthier, more efficient companies — or governments. He said states, counties and cities should consolidate overlapping units and cut overly generous pay and pensions, he said.
Some public-sector employees “probably do deserve [their current pensions], like the police and firemen,” he said. But for “the ones that sit behind a desk,” he added, their pensions “should be comparable to the private sector.”
'Not an easy job'
When Jordon runs into people with such complaints, or who are amazed that she was able to retire at 54, she replies that her benefits were not her idea. And she feels as if she earned her pension.
“Keeping up with 150 eighth graders is not an easy job,” she said.
As with Murphy, pensions were not much on her mind in 1971, when she and her husband had both graduated from Emory University with geology degrees.
Most of their classmates took jobs as petroleum geologists, but Jordon said she and her husband stayed at Emory and got master’s degrees — hers aimed at teaching.
In 1973, she took a job teaching earth sciences to ninth-graders at a high school in DeKalb County. Her husband, who had also been teaching, stayed home with their daughter.
She discovered she loved teaching. By living in a modest house and driving the same cars up to 20 years, she said, “we were able to survive on one income.”
With summers off, they toured the country for five or six weeks at a time.
At first, she was surprised that teachers were required to contribute to the Teachers Retirement System of Georgia through payroll deductions. Private-sector companies typically don’t require such contributions. “As a young teacher, when my check was $600 a month, and my rent was $169 a month, it was a real shock when they took all that stuff out,” she said.
At first she viewed it as a “forced savings account.” But as the years went by, her future pension benefits became another reason she stayed in the job. For 28 years, she taught at the same high school.
“I loved going to work,” she said. “My goal was to teach at least 35 years.”
That would have enabled her to retire at 58 with at least 70 percent of her salary.
“But things change,” she said.
When DeKalb County opened a new middle school nearby, she transferred to it, attracted by a raise in pay and the chance to help launch a new school. But she soon learned she had made a mistake.
“It was not run well,” she said. Chronic discipline problems meant the new school was like “being in a war zone,” she said. Stress began to affect her health.
After three years at the school — four years short of her goal — she retired.
These days, Jordon collects about $42,000 from her pension plan, about two-thirds of her pay as a teacher. Until it runs out in a few years, she’s also getting about $10,000 a year from a retirement savings account the school system created when it opted out of Social Security in the late 1970s.
She has returned to teaching part time as a substitute — not for the money, she says, which is minimal, but because she loves teaching.
Jordon figures she could have made much more money if, years ago, she had become a geologist at some oil company. But she’s glad she chose teaching.
“I’ve never regretted it a minute,” she said.
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