“While Democrats say Teachers ‘Have Kept Their Part of the Deal?’“
is the title of an April 5, 2011, article by former Huntley School District 158 Board member Larry Snow. (The quote was in the Chicago Tribune Marcy 31, 2011. It is from Executive Director Dick Ingram of Teachers’ Retirement System.)
The article was published in “The Champion” with this teaser:
“82,981 of 132,502 Illinois Teachers Pay Nothing or Little into Their Pensions“
That’s 63% of all teachers in Illinois.
The State Journal-Register is reporting that State Rep. Kevin McCarthy (D-Orland Park) is promoting a bill where state and local governments would all pay six percent of payroll toward employee pensions.
In a revealing sentence in reporter Chris Wetterich’s article, he writes,
“What’s unclear is how much more employees themselves would have to pay.“
Because no one has done the research except, I believe, the Illinois Education Association and Snow, how much extra teachers would have to pay if their so-called contribution rate was raised from 9.4% to 13.77% is a really good question.
While not covering every school district in Illinois, Snow did research the teachers’ contracts for all of the large school districts (by law all are supposed to be on the internet) in order to find out how much teachers pay in order to get a “full 75 percent pension after working only 27 years.” He points out, “Most adults work for 27 years before they turn age 50.”
As way of background, Snow notes that teachers are not in the Social Security System and, therefore, are not forced to pay Social Security taxes.
“Ordinary workers get hit with a 6.2 percent deduction for Social Security,” Snow writes. “It’s a deduction they have to pay federal and state income taxes on.
“Democrats gave teachers a huge loophole of not paying income taxes on any of their pension deductions” he continues. “This enormous no-tax handout to teachers amounts to billions of dollars each year.”
Snow’s research leads him to this conclusion:
“Over 51,000 of the total 132,502 teachers in Illinois contribute nothing from their K-12 paychecks into their pensions. Illinois law says it is to be 9.4 percent.
“About an additional 32,000 teachers pay little into their pensions. It is 1.81 percent to be precise for these 31,956 teachers.“
How many teachers pay not a dime toward their retirement?
51,025 teachers in 186 school districts pay nothing for retirement benefits.
They “don’t pay a penny into the 9.4 percent called out by Illinois law.
“There are a total of 868 districts in Illinois.
“The pay-zero teachers listed are 39 percent of all teachers in Illinois,” Snow reveals.
No agency in state government seems to keep track of this information.
Not the Downstate Teachers Retirement Fund, which boldly and incorrectly claims,
“Active TRS members are required to contribute 9.4 percent of their creditable earnings each year…”
The State Board of Education doesn’t keep track either.
My guess is that only the Illinois Education Association has a matrix showing what school districts have given what benefits in contract negotiations.
Snow discovered this about Lockport:
“…on page 14 of the Lockport Township HS 205 teachers contract it reads:
- The Board will pay the current level of retirement contribution to the Teachers Retirement System of Illinois.”
- It is expressly understood that figures appearing on this salary schedule include a sum equal to the current level of TRS contribution of the base salary of each Teacher which is, in fact, payable to the Teachers’ Retirement System on the Teacher’s behalf.”
“The ISBE report shows this board paying nothing. A Democrat bureaucracy doesn’t check the teachers contracts to see if what is reported, matches what’s in writing.”
And, if legislation is passed requiring 4.37 percentage points more, how long do you think it will take Lockport taxpayers to pick up the difference?
Given that local teachers’ unions pretty much control school boards wherever they are elected (read everywhere but Chicago), my guess is will be on the top of the collective bargaining list.
Do you wonder if Rep. McCarthy knows that?
Is his proposal just a setting up local taxpayers for an even bigger fall?
Five years from now will 39% of teachers still be paying nothing for their pensions?
Even better for teachers is that this pension payment ups their pension payments.
Take a look at the chart below. Chances are your school district is on it.
Chart of Pension Contributions by 82,981 District Teachers of 132,502 Total Illinois K-12 Teachers
Name of District No. of Teachers Percent of Pension
Contributed by Teachers
Thornton Twp 205 428 Zero Proviso 209 281 Zero Waukegan 60 1,098 Zero Morton 201 455 Zero Kankakee 111 348 Zero Joliet 204 340 Zero Round Lake 116 387 Zero Rockford 1,843 Zero Decatur 61 454 Zero Crete Monee 340 Zero Danville 118 382 Zero Valley View 365 1,068 Zero Aurora West 129 706 Zero East Peoria 309 69 Zero Galesburg 281 Zero Bremen 228 313 Zero Freeport 317 Zero Leyden 212 219 Zero Elgin U-46 2,332 Zero Rock Island 388 Zero Mattoon 225 Zero Collinsville 394 Zero Massac 1 143 Zero Sterling 219 Zero Belvidere 531 Zero Quincy 436 Zero Dixon 179 Zero West Chicago 248 Zero Cook County 130 289 Zero Cicero 99 738 Zero Joliet 86 617 Zero Harvey 152 163 Zero Crystal Lake 155 412 Zero Crystal Lake 47 564 Zero Wheeling 21 489 Zero Champaign 4 717 Zero United CUSD 304 68 Zero Riverdale 100 76 Zero Reed Custer 255 114 Zero Wilmington 209U 84 Zero United Township 30 90 Zero Summit Hill 161 213 Zero Plainfield 1,695 Zero Schiller Park 81 98 Zero Dolton 149 176 Zero Township 211 Palatine 799 Zero Ball Chatham 5 248 Zero Taylorville 3 152 Zero Williamsville 15 81 Zero Harrisburg 3 130 Zero Belleville 201 281 Zero Dupo 196 76 Zero O’Fallon 203 145 Zero O’Fallon 90 207 Zero Rochester 3A 142 Zero Pekin 108 248 Zero Morton 709 175 Zero New Lenox 122 287 Zero Frankfort 157 158 Zero Marion 2 219 Zero Carterville 5 110 Zero Kinnikinnick 131 122 Zero Tolono 7 116 Zero Mahomet-Seymour 3 161 Zero Champaign 4 717 Zero Urbana 346 Zero Charleston 1 180 Zero Park Ridge 64 319 Zero Evanston 202 222 Zero Maine HSD 207 508 Zero Arlington Heights 214 753 Zero Niles 219 350 Zero Berkeley 87 165 Zero Berwyn South 263 Zero Lyons 204 239 Zero Lemont 113 144 Zero Palatine 15 713 Zero Schaumburg 54 1,003 Zero Oak Lawn 123 203 Zero Oak Lawn 229 114 Zero CHSD 230 Orland Park 519 Zero Argo 217 111 Zero Homewood 233 174 Zero Genoa 424 137 Zero Sycamore 427 231 Zero Dekalb 428 362 Zero Lombard 44 216 Zero Downers Grove 58 277 Zero Hinsdale 86 296 Zero Elmhurst 205 538 Zero Naperville 203 1,063 Zero Effingham 40 176 Zero Canton Union 66 175 Zero Morris 54 61 Zero Morris 101 50 Zero Coal City 1 138 Zero Jersey 100 164 Zero Central CUSD 301 224 Zero Kaneland 302 275 Zero St. Charles 303 880 Zero Cahokia 298 0.4 Chicago Public Schools 23,219 2 Peoria 150 988 0.4 Springfield 1,105 0.4 Moline 40 461 0.4 Harvard 149 0.87 Dolton 148 236 1.4 Belleville 118 228 0.4 Pekin 303 125 0.4 Hononegah 207 118 0.4 Arlington Heights 59 444 3 Leyden 212 219 0.4 Summit 104 103 0.4 Palos 118 130 0.4 CHSD 219 Orland Park 519 0.4 Bensenville 2 145 1.4 DuPage 88 266 0.4 CHSD 94 122 0.9 CUSD 300 1,189 4.4 Hawthorn 73 253 1.4 Lake Forest 115 132 0.4 Wauconda 118 273 0.4 Johnsburg 12 158 0.4 Cary 26 192 4.9 Woodstock 200 385 1.4 Keeneyville 20 107 0.4 Winnebago 323 117 0.4 LaSalle-Peru Twp. 120 88 0.7 Prairie-Hills 144 187 0.4 Geneva 304 367 Zero Herscher 2 126 Zero Manteno 5 160 Zero Bourbonnais 53 160 Zero Bradley 61 103 Zero Bradley Bourbonnais 307 114 Zero Momence 1 88 Zero Yorkville 115 329 Zero Plano 88 154 Zero Oswego 308 827 Zero Streator 44 132 Zero Ottawa 141 140 Zero Ottawa 140 102 Zero Glenview 34 343 Zero Zion 6 177 Zero Grayslake 46 266 Zero Elmwood Park 401 181 Zero Libertyville 70 159 Zero North Shore 112 374 Zero HSD 113 Highland Park 249 Zero Grant 124 91 Zero Zion-Benton 126 156 Zero Evanston 65 547 Zero Grayslake 127 187 Zero Meridian 15 64 Zero Mt. Zion 3 133 Zero Edwardsville 7 480 Zero Alton 11 467 Zero Macomb 185 130 Zero McHenry 15 282 Zero McHenry 156 158 Zero Nippersink 2 92 Zero Columbia 4 111 Zero Waterloo 5 166 Zero Hillsboro 3 114 Zero Meridian 223 113 Zero Illinois Valley Central 321 139 Zero Carbondale 165 76 Zero Carbondale 95 105 Zero Riverton 14 85 Zero Auburn 10 90 Zero Pawnee 11 47 Zero Panhandle 2 35 Zero Sullivan 300 75 Zero Centralia 135 93 Zero Litchfield 12 83 Zero Harlem 122 505 Zero Granite City 9 617 Zero Princeton 115 86 Zero Princeton 500 43 Zero Bond County 2 120 Zero Duquoin CUSD 300 101 Zero Rocton 140 102 Zero Rochelle Twp. HSD 212 71 Zero Rochelle CCSD 231 131 Zero Byron 226 127 Zero Oregon 220 104 Zero Farmington Central 265 85 Zero Porta 202 75 Zero River Bend 2 71 Zero Red Bud 132 73 Zero Sparta 140 105 Zero Southwestern 9 107 Zero Staunton 6 87 Zero Gillespie 7 81 Zero Hamilton County 10 83 Zero Midwest Central 191 85 Zero Tuscola 301 86 Zero West Carroll 314 99 Zero Oakwood 76 64 Zero Hoopeston 11 94 Zero Westville 2 80 Zero Beardstown 15 98 Zero El Paso-Gridley 11 99 Zero Murphysboro 186 137 Zero Monticello 25 111 Zero Paris-Union 95 74 Zero Mt. Vernon Twp. 210 80 Zero Mt. Vernon 80 109 Zero Jasper County 1 101 Zero Steger 194 128 Zero Calumet City 155 77 Zero North Boone 200 116 Zero CCSD 93 Carol Stream 294 Zero East Maine SD 63 254 Zero Lockport Township HS 205 205 Zero Above Teachers Total 82,981
The teachers and unions negotiated for it, many got it, and eventually it will be “free (or next best thing to free) pensions” courtesy of the taxpayers wallet and the children’s piggy banks.
When you have two sides at a negotiating table and one side can simply call a strike if it doesn’t get what it wants – that’s the way it goes.
People in the industry and people in the news business and people in elected office want you to think the majority of or all teachers actually pay that 9.4% out of their own pockets. The legal wording was a nice attempt to pacify you.
So the next time anyone in the Education world/industry, an elected official, or a news person/paper wants to pacify you AGAIN with that baloney ….recognize it for the snake oil it is and call them on it.
It may be cleverly worded or buried in a contract, however, it’s still extra taxpayer money tacked on in addition to any other raises or benefits.
It looks like Democrat scam artists did this so teachers don’t pay 6.2% like every private person has to pay into Social Security.
No teacher “needs” getting paid huge final pensions and that is after they pay zero dollars into their pension.
FDA and YMWTK – You two consistently beat the same fabricated horse. At what point will you stop pretending that any employer paid pension is not simply a component of compensation? Why do you insist on pretending otherwise when both of you know better?
Why do you care if someone earns $X and pays 9.4% of $X to the pension or earns 90.6% of $X and has the employer pays 9.4% of $X directly to the pension? It is just illogical. A cost of $X is a cost of $X. Please stop pretending otherwise and please attempt to be honest with yourselves and the public.
If the argument is about the total empoyer cost/total employee compensation, why don’t you argue that? Total cost matters.
Agree or disagree with a specific conclusion, that would be logical to argue.
Is it also a problem for you that some are paid semi monthly vs biweekly or vice versa? Do you object to when they are paid over 12 months instead of the school year? Are you bothered by any other details that don’t materially impact the financial arrangement?
Now as to the question of how contracts are worded, districts should be stating specific %’s or something to avoid phantom unintended cost increases. Contracts should be worded clearly.
Separately, how does one earn a 75% pension at age 50 as is implied above with 27 years? The answer is one doesn’t because it isn’t permitted. Age 55 is the earliest retirement age and then full benefits are available only with 35 years of service. With 20-35 years, there are significant benefit reductions for retiring at 55. Secondarily, full benefits require an absolute minimum of 33 years to earn as I see it on the TRS website. A good deal nonetheless, but not what is implied above. Is there information to the contrary that I don’t see?
Laird, you must pretend teachers don’t take years off with baby children, but still want an incredible pension as if she always taught kids every year.
Teachers get higher pensions because there is a scam of pretending two more years of not working, should give them extra years of pension credit. It’s called credit for “sick days” they never needed.
And how much do politicians pay into their pensions? Why is there such a witch hunt after teachers but not after other people who get pensions?
YMWTK – You are half right. I took into account one year. I stand corrected that 32 yrs working (not 33 yrs as above) is the absolute minimum to earn a full pension. I apologize for that error on my part. This is still not 27 yrs and not at age 50.
I am confused by your comment about child rearing. Are you suggesting that there is somewhere that they can be paid for or earn pension service credit for the years that they are home? I know our district will only pay for the full twelve weeks of FMLA in certain circumstances. Or are you suggesting that they can somehow work less than the full 32 years above and still get full credit? I am unaware of such an arrangement.
Otherwise, their staying home does a few things that I would think would please you. Most teachers not only stop moving on a pay scale, they actually lose 50-100% of their years of experience on the pay scale. So, many of them start over as if they hadn’t worked in the field at all. This presumably decreases their pay for the years on which the pension is based resulting in lower benefits. Assuming that they would only work the number of years required to earn a full pension either way, deferring their retirement date shortens the period over which benefits will be paid as well. Lower benefits for a shorter duration, I would think you would do cartwheels over this.
NAGR – The TRS pension system is different from the others. The state legislators and other state employees are just that state employees. It makes complete sense for the state to be on the hook for the pensions. Teachers and administrators are local employees. The other local employees are covered under IMRF or some other local pension plan for some police and fire districts I believe. Local employers and employees make full actuarially determined contributions each year based on earnings, service and most importantly age.. The state really only assumes investment risk. Additionally, it takes longer to earn the full pension at least under IMRF with the exception of some elected officials. I don’t know much about the terms or operation of state pensions or police/fire pensions.
TRS is set up very differently. Employers and employees contribute fixed percentages of compensation without regard for proximity to retirement. So a year of service from 50 yr old earning $40,000 is much more costly to the pension plan than a $40,000 year of service from a 35 yr old. Under IMRF, the employer would pay more for the former. Under TRS, the exact same amount is contributed for both. The state assumes not only investment risk, but contribution risk because there is no correlation between the actuarial cost of a year of service and contribution. It was originally designed to be a secondary subsidy of education. In addition, there was a practice known as pension spiking prior to laws enacted over the last decade or so. Huge raises could be given by local districts to pump up pension of soon to be retiring individuals. This had a significant deleterious effect on the finances of TRS along with the state’s non payment of contributions. The state is on the hook for a badly designed plan. It should never have been set up the way it was, but here we are.
Laird is always untruthful, for example, writing about a distraction about IMRF when he knows ZERO certified teachers are involved with any IMRF.
Then there is deceiving a generality talking about a 50 year old teacher getting paid $40,000 when he know districts don’t have 50 year old teachers who only make $40,000. A teacher like this is RARE, RARE, RARE and more RARE.
Laird knows that teachers can stay out of work for years yet when they go back to work will get a LARGE pay increase for their next first year.
YMWTK, talk about the pot calling the kettle black! Laird is always untruthful? I’ve seen you throw out so many half-truths, spin, and out-right lies, you have no right to call anyone else untruthful. While Laird and I have not always seen eye-to-eye, and I have not always agreed with his interpretations, he has more integrity than you have ever dreamed of.
First, what distraction? Did you not read the question from NAGR of why the most vigourous attacks at public pensions are aimed at teachers? Shall I apologize for making an earnest attempt to answer a legitimate question?
Second, the contrast between the systems is far more visible when different ages earn the same amount hence the example.
Third, you have no basis for alleging that fifty year olds earning 40,000 is RARE. You have no statistics. I can name two off the top of my head and probably a few more giving it a little thought. It will likely become more rare with my generation because much like the private sector the stay at home mom is a dwindling breed. However, currently it is not as rare as you claim. At least not out here.
Finally, I believe that you have personal knowledge that contradicts the innacurate if not intentionally misleading statement about large increases awaiting those returning to the workforce. Every district (including D158) that I am aware of severely discounts or entirely eliminates prior service if more than a year (maybe two) off is taken.
I don’t know what agenda the author is pushing. But I do know either he doesn’t know what he’s talking about or he’s being disingenuous with a straw man argument by stating something is there that isn’t and then attacking it.
I am a downstate IL public high school teacher. For 17 years, my employer has been sending 9.4% of my salary to TRS (downstate teacher retirement system–Chicago teachers have a separate system). The 9.4% is part of my compensation. It is listed as a dollar amount each paycheck under the benefits column. It could easily be moved in the computerized payroll program from the benefits column to the income column and then subtracted back out. Being listed as a benefit may or may not have something to do with federal tax sheltering of retirement contributions. I’m not sure. I know my retirement contributions are tax sheltered by the school. If I stop teaching in IL and am not old enough to retire, TRS would send all of the 9.4% contributions back to me, not my school district, since I am the one who EARNED IT.
The author needs to get his facts straight before attempting to villify public school teachers as a bunch of union thugs and thieves. Does he think teachers should be paid minimum wage? Is that what students are worth? $8.00 per hour divided by 25 to 30 students per class. I didn’t go into teaching to become rich and I assure you I am not.
I want to add that a school district in IL is required by TRS to send the 9.4%. A teacher can’t send their own payment of 9.4%. Our contract states clearly that the 9.4% will be paid as a benefit for the teacher. Therefore, it is part of our compensation. We could easily change the contract to say that the teacher will be paid the 9.4% and then the district will deduct it and send it to TRS. This is semantics isn’t it?
So, if all school districts listed the 9.4% under the income column on teachers’ paychecks and then showed the subtraction of it back out and stated it was being sent to TRS, would that make the author happy? I think he would construct a ridiculous argument that this was also a sham. The fact is that the 9.4% belongs to the teacher because if they quit teaching early or die before retirement, those contributions would be returned to the teacher or his heirs and not the school district. Doesn’t that establish clear ownership of the contributions?
Millionaire teachers at taxpayers expense due to huge pensions that run for decades and decades! Unbelivable! This greed has to be stopped, NOW!!!
False: 39% pay nothing for pensions
False: “…they pay zero dollars into their pension”
True: 9.4% is what all pay, whether through salary or benefit. No matter how it is paid it is part of teacher salary as some have explained
False: 27 years teaching for full pension benefits
False: 32 years teaching minimum for full pension benefits
True: 35 years for full pension benefits, two year accumulation of sick leave possible, maternity leave is part of that if taken, leaving absolute minimum of 33 years necessary for full pension benefits. Plus, teacher must be 55 or older and have all those years. Many retire between 55 and 60 years of age, but if they want full benefits they must meet the 35 years in (not including 2 years sick leave if accumulated) and be 55 or older. Reductions of pension benefits are substantial for every year you go under those 35 years (or 33 if you have the sick leave).
False: “you must pretend teachers don’t take years off with baby children”
Truth: few do this, the pension reduction and salary loss through years of experience lost is to great.
Fact: The higher paid teachers in any district have masters degrees and up to 60 graduate credit hours beyond that, some with PhD’s.
Fact: A teacher with say 25 years’ experience cannot leave his position, go to another school district in the same position, and get 25 years. The most they will give is about 7 or 8. The reduction in salary, from an equal paying district, is more than substantial.
Years Exp: 32
Education: Masters Degree plus 60 post graduate hours
Board paid pension contributions are employee perks negotiated by unions into collective bargaining agreements.
As an analogy, does your employer pay your employee portion of your 401k contribution?
The State of Illinois also makes employer pension contributions on behalf of the district. In fact, TRS is set up so the State of IL, not the employee or the District, is the major contributor.
TRS calls this “State of IL contribution rate as a % of Creditable Earnings not paid in Federal Funds”.
For example, FY Ending June 30, 2009 was 17.08%, 2008 was 13.11%, and 2007 was 9.78%.
In FY year ending June 30, 2007 the contribution rate was based on a dollar amount specified by the statute and was not actuarially determined.
Wouldn’t it be nice if the State of IL contributes that % of your income to your 401k? Of course the State of IL doesn’t fund your occupation in this manner.
The State Contributions are the late, partial, non, or bond funded payments you read about every year in the newspaper. Cal previously made the point that Unions in the past advocated such actions because the Governor included the pension payment in bucket of money allocated to Education, and the Unions wanted more money to go to other areas.
Mike Laird summarized other characteristics of TRS as follows.
“TRS is set up very differently. Employers and employees contribute fixed percentages of compensation without regard for proximity to retirement. So a year of service from 50 yr old earning $40,000 is much more costly to the pension plan than a $40,000 year of service from a 35 yr old. Under IMRF, the employer would pay more for the former. Under TRS, the exact same amount is contributed for both. The state assumes not only investment risk, but contribution risk because there is no correlation between the actuarial cost of a year of service and contribution. It was originally designed to be a secondary subsidy of education. In addition, there was a practice known as pension spiking prior to laws enacted over the last decade or so. Huge raises could be given by local districts to pump up pension of soon to be retiring individuals. This had a significant deleterious effect on the finances of TRS along with the state’s non payment of contributions. The state is on the hook for a badly designed plan. It should never have been set up the way it was, but here we are.”
It is easy to get folks riled up with how much teachers are paid. How dare they be paid a professional salary for professional work! People are coming unglued over how 9.4% of their salaries are saved for their pensions, but no one seems to blink at the corporate welfare going on in this country. No one realizes that the state of our economy has more to do with incredibly greedy politicians and big business gutting the middle class. Be mad about that not about your neighbors who spend the entire day with your children trying to educate them to be productive citizens someday. Be mad at the ones who caused this mess and stop kicking the dog. Have the guts to zoom on the real causes!
First. as a retired teacher/administrator, I would like to reiterate that when board agrees across the bargaining table to “pay” my 9.4% contribution to TRS, that contribution is in effect monies paid to TRS from my earned salary.
If one is to be mad about the author’s long list of contracts offering board-paid retirement, the argument should equally be aimed at 39% of the state’s school boards.
I’m looking at a pie graph provided by TRS for total income 1991–FY2010 which shows that 25% of income has been contributed by the state, 22% by active members, 4% by school districts and the remaining portion ,49% resulted from TRS investments, 50% of which came from retirees like me.
Oh, my. I just checked that list and it shows that I do not pay into my pension. That’s weird, because for the last 15 years in District 214, I have paid 9.4% of every check to my pension. I guess Larry Snow didn’t ask to look at my pay check. Or at the paychecks for all of the districts on that last. Too bad his error soaked article has been circulated all around without bother to check his “facts.” The original publisher of the article, The Champion, has already taken it down.
The article is on the Champion website, but not the chart.
Here is the link to the Larry Snow article on Champion dated April 5, 2011.
The title is, “82,981 of 132,502 Illinois Teachers Pay Nothing or Little into Their Pensions.
Here is the link to the Illinois State Board of Education (ISBE) website that indicates in the 2010-2011 school year ISBE reported that 64.6% (559 of 865) of school districts in IL consider teacher retirement to be board paid.
On page 6 of that report (page 10 in the Adobe document), locate Table 10, which is titled, “Mean Percentage of Teacher Retirement that is Board Paid, by District Type and Size, and by Percentage of Districts that Consider Teacher Retirement to be Board Paid”.
That’s the source of the above figures of 64.6% (559 of 865) of school districts consider teacher retirement to be board paid.
In those 559 districts, the teacher is contributing little or nothing to their pension plan. The employer (school district) is making all or most of the “teachers” 9.4% contribution to the TRS pension plan.
On October 13, 2011 the Illinois Policy Institute released a 41 page Tax and Budget Brief titled, “Teacher Pensions, Who’s Really Paying?” – “Many teachers contribute nothing; taxpayers shoulder burden.”
Illinois Policy Institute Press Release: Not All Public School Teachers Pay ‘Fair Share’ of Pensions
MEDIA CONTACT: Diana Rickert
Diana@IllinoisPolicy.org or (312) 607-4977
Report: Teachers in two-thirds of Illinois public school districts don’t pay full “employee share” to pensions
In nearly half of public school districts, teachers pay nothing toward their own retirement
CHICAGO (Oct. 13, 2011) — Teachers in two-thirds of Illinois public schools contribute little or nothing toward their own retirements, a new report by the Illinois Policy Institute has found.
Public employee unions balked at pension reform when it was introduced this spring because they claimed government workers already “paid their fair share” by contributing “8 percent, 9 percent or more from each paycheck” to their pensions. But when it comes to public school teachers, paying their own way to retirement isn’t the norm.
“In almost half of all school districts in Illinois, taxpayers are on the hook for 100 percent of teachers’ pensions,” said Ted Dabrowski, vice president of policy at the Illinois Policy Institute, a free market think tank. “This totally contradicts union claims that teachers pay their ‘fair share’ for their own retirements.”
Continuing with the press release.
In a review of hundreds of union teacher contracts and public documents from the Illinois State Board of Education and Teachers’ Retirement System, the Institute found that:
Teachers in nearly half of public school districts pay nothing toward their own retirement; instead, taxpayers pay the teachers’ required contribution of 9.4 percent, as well as the employer contributions on behalf of the district and the state.
In 16 percent of school districts, teachers pay only part of their required employee contribution to their pension.
Illinois taxpayers could have saved more than $400 million during the 2009-10 school year if teachers paid their share of retirement costs.
Continuing with the press release.
A list of all 867 Illinois school districts (excluding Chicago Public Schools), and whether teachers in these districts pay their own way to retirement is available in the report.
“Illinoisans are struggling with unemployment and higher tax bills. Schools are cutting programs and the pension system is crumbling,” Dabrowski also said. “To ask that teachers pay their share and reduce the burden on taxpayers is only reasonable.”
Report, including a list of all 867 Illinois school districts and whether their teachers pay their own pension contributions, is available online by clicking here.
For bookings or interviews, contact Diana Rickert (312) 607-4977.
The Illinois Policy Institute is a nonpartisan research and education organization dedicated to making Illinois a beacon for liberty and prosperity for all citizens. As a leading voice for economic liberty and government accountability, the Institute engages policy makers, opinion leaders and citizens on the state and local level by promoting free market principles and liberty-based public policy initiatives for a better Illinois. To learn more about the Institute or review policy briefs, please visit: http://www.illinoispolicy.org.
How dare you report that Geneva teachers contribute ZERO to the retirement system? I taught there for 31 years and had the full 9.4% withheld every month from my gross salary. I paid into the system from service in another at the same rate.
This is a blatant lie and I want an explanation as to how you think you can befuddle the public with such grossly errant information.
Former Huntley School District 158 Larry Snow did the research, looking at individual contracts in all cases, he told me.
Unfortunately, he died last fall so I can’t ask him to double check Geneva’s contract.
school district 189 in east st.louis,il institutes a massive tax rate hike of 30% under the direction of state supt of schools chris koch.they ar screwing our eyes out!
Responding to the person from Geneva 304 – Just took a look at Geneva Education Association contract (online but not exactly easy to find) re TRS – sure looks to me like the taxpayers/district pick up the portion the teacers are “supposed to pay”.
Microsoft Word – MASTER FINAL GEA Contract – 2009-2012.doc
computer page 25 of 59, aka document page 22 of 56, item section 6
” This required “pick-up” amount, although designated as employee contributions to the Retirement System, shall be paid by the District in lieu
of contributions by the teacher.”
That sure sounds like the teachers aren’t paying it and more like they negotiated for the district to pick up the teachers’ portion.
This is inaccurate. I work in CUSD 230 and all teachers pay the 9.4%. Please check facts… Thank you
The list is incorrect. Carol Stream CCSD93 teachers pay for their pensions 9.4%.
PLUS, teachers .97% because the state of Illinois mis-managed the funds.
This is money they will not see.
Why are you ignoring the history of how this came to be?
These were school board proposals, not teacher proposals.
It cost school boards less to [pay pension contributions than to give increases in pay.
Now after teachers agree to do this to help the boards, they are called cheats and scammers.
The author conveniently ignores what teachers gave up to get this so called “paid” pension contribution.
No salary increase was the price of a paid contribution to the pension fund.
Ignoring total compensation to try to appeal to a public perception of teachers getting something others don’t get is pretty sad.
“Now after teachers agree to do this to help the boards, they are called cheats and scammers.”
Teachers routinely put a gun to the head of the electorate by striking.
The results of a contract negotiation under duress are void. For example, if a madman put a gun to your head and threatened to blow your brains out unless you promised to pay him a million dollars, should we enforce the contract?
“Negotiations” with teachers’ unions are just as invalid and they differ only by the severity of the duress.
Let’s ask an honest question:
There have been many updates on the amount teachers contribute to their pension fund.
Illinois Policy Institute
Understanding Teacher Pension Pick ups
May 11, 2012
by Ted Dabrowski
Little-noticed pension perk for teachers widespread in Illinois
by Diane Rado
“A teacher salary study published in April by the Illinois State Board of Education shows that 499 of 769 districts that responded said they were covering all or some payments for their teachers, with most districts reporting they covered the full 9.4 percent contribution.”
As mentioned above, effective July 1, 2016, the full teacher contribution is now 9.0%, not 9.4%.
The .4% was a contribution for Early Retirement Option (ERO).
ERO expired on June 30, 2016, as it was not renewed by state legislators.
Upon retirement, teachers received a refund for the .4% contributions if they did not utilize ERO.
Illinois Policy Institute
64 percent of Illinois school districts pick up pension contributions for teachers
May 22, 2015
by Benjamin VanMetre
“Every year, the Illinois State Board of Education compiles its annual “Illinois Teacher Salary Study” by asking a series of questions directly to each school district, one of which is whether the district picks up the teacher’s share of the 9.4 percent employee pension contribution.”
Illinois State Board of Education
Illinois Teacher Salary Study
http://www.isbe.net > Division and Program Areas > Data Analysis > Teacher Salary (Illinois)
The Chicago Tribune article above is dated August 26, 2015
Byron Teachers pay 100% of their TRS and THIS.
We took the burden off of our board when things with TRS became uncertain and might rise.
Our district pays 0%!
Get your facts right please.
It was correct at the time the article was written and for Byron CUSD 226 was correct information at least through the end of the 2015 – 2016 school year (approximately June of 2016).
Byron has yet to post on their website the collective bargaining agreement for the 2016 – 2017 school year.
School districts are required by state law to post collective bargaining agreements on their website.
Here is the language in the past collective bargaining agreements indicating the pension pick up (Board Paid TRS).
Article XIII: Retirement Contributions
As a benefit to the teachers, the Board will withhold his or her required contribution to the State of Illinois Teacher’s Retirement System (hereinafter referred to as “TRS”) and his or her required contribution to the Teacher’s Health Insurance Security Fund (hereinafter referred to as “THIS”) from his or her creditable earnings, including but not limited to salary and extra-duty or extracurricular stipends, and remit said amounts to TRS and THIS on behalf of said teachers.
By entering into this Agreement, it is the intent of the parties to qualify the amount withheld from each teacher’s salary and remitted to TRS and THIS under this paragraph 13.1 as “picked-up” contributions within the meaning of Section 414(h)(2) of the Internal Revenue Code so as to be excludable from the gross income of Section 414(h)(2) of the Internal Revenue Code so as to be excludable from the gross income of all teachers.
The teachers shall have no right or claim to the funds so remitted except as they may subsequently become available upon retirement or withdrawal from participation in TRS.”
The following regarding such pick-ups is from the Internal Revenue Service (IRS) website.
However, the IRC section 414(h)(2) provides that for any plan established by a governmental unit, where the contributions of employing units are designated employee contributions, but the employer “picks up” the contributions, the contributions are treated as employer contributions.
For the employee contributions to be deemed picked up by the employer and therefore to be characterized as “employer contributions”, certain tests must be met.
A series of rulings by the IRS established that only amounts that the governmental employer pays (including certain amounts withheld or otherwise offset from the employee’s salary) are considered employer contributions, and are therefore excludable from gross income.
In Revenue Ruling 2006-43, the IRS clarified the requirements for employee contributions to be considered made, or picked up, by the employer.
– Specifies that the contributions, although designated as employee contributions, are being paid by the employer.
For this purpose, the employing unit must take formal action to provide that the contributions on behalf of a specific class of employees of the employing unit, although designated as employee contributions, will be paid by the employing unit in lieu of employee contributions.
– Does not permit a participating employee, from and after the date of the “pick-up”, to have a cash or deferred election right with respect to designated employee contributions.
Participating employees must not be permitted to opt out of the “pick-up”, or to receive the contributed amounts directly instead of having them paid by the employing unit to the plan.
Further details of these requirements are contained in Revenue Ruling 2006-43.
One sentence above has typos.
Here is the correct verbiage for that section.
By entering into this Agreement, it is the intent of the parties to qualify the amount withheld from each teacher’s salary and remitted to TRS and THIS under this paragraph 13.1 as “picked up” contributions within the meaning of Section 414(h)(2) of the Internal Revenue Code so as to be excludable from the gross income to all teachers.”