Hammond teachers are getting a lesson in economics. Not only are they facing rising health insurance costs in their new contract, but the retirement investments they made in annuities are falling along with the U.S. economy.
Many schoolteachers across the country, including those in Hammond and East Chicago, invest in annuities offered by The Variable Annuity Insurance Co. VALIC is a subsidiary of the failing insurance giant AIG, which the U.S. Congress has twice bailed out with more than $122 billion in the last few weeks.
And those teachers are discovering dropping retirement revenue even in fixed annuity accounts.
"My VALIC account and those of my friends have lost $300 since Monday," said one retired teacher who asked to be anonymous. "I don't like that AIG has anything to do with my annuity. I want to get my money out."
Another Hammond teacher said, "My VALIC account has lost money because of the market. I'm putting in more money and it's going down."
However, the markets will go back up, that teacher said, and the annuity investments will begin making money again.
Juanita Hamlin, a speech pathologist in Hammond elementary schools for the past 29 years, said she's not ready to take her money out of VALIC investments, either.
"It's more alarming for those who are in retirement or nearing retirement," Hamlin said. "You have to be different in the way you see your money."
In addition, Hammond teachers are facing increased costs for health insurance as a new contract comes up for ratification next week. On Thursday, Hammond Federation of Teachers union held an informational meeting at the Area Career Center and answered questions about the contract.
According to sources, the new contract offers teachers a choice in their medical insurance plan. That means they will pay more for health care either in premiums or co-pays. Teachers' paychecks might increase slightly, the sources said.
Patrick O'Rourke, president of the 1,000-member Hammond Federation of Teachers, would not comment on any details of the contract because it has not been voted on yet. A Times photographer and reporter were asked to leave the career center's auditorium before the meeting started.
O'Rourke said the contract details were outlined in a seven-page letter that was distributed to schools Monday.
Teachers were given details and encouraged to discuss the contract Tuesday and Wednesday, he said. Thursday's meeting was held to answer any final questions teachers had before they vote Oct. 13 and 14.
"Once the teachers have ratified it, I am confident that the School Board will approve it," O'Rourke said before the meeting. "We don't expect many people." Fewer than 100 teachers attended the meeting.
Sources said Hammond teachers will have a choice of insurance premiums with Anthem Blue Cross & Blue Shield.
One option has their benefits remaining the same, but their premiums doubling in cost. Currently teachers pay $300 a year for a single plan and $600 for a family plan. The new cost would be $600 for single coverage and $1,200 for families. The second choice is to keep premiums at current levels, but co-pays and prescription prices would double to $20 to visit a doctor, $18 for generic drugs and $32 per non-generic prescriptions.
"We used to pay $1 a year for health insurance. The $300 and $600 seem like a lot of money compared to that," one source said.
The silver lining, according to sources, is a $750 rebate every teacher will receive from Anthem in April of next year and small pay increases. If the contract is approved by teachers and the Hammond School Board, teachers would receive a 2 percent pay increase retroactive to January 2008 and another 2 percent increase in January 2009.
