Pensions, Penalties, and Rule Followers

dead-horse
Graphic courtesy of http://www.hikingartist.com

Today’s headline in the Chicago Tribune is, “Taxpayers socked twice: Pensions and penalties” (May 24 2015.)  The article goes on to tell how some teachers and administrators are given raises in their final few years of work, which helps boost their retirement income (since retirement pay is based on the average of the employee’s salary their last four years).  The Trib says that increasing the salary socks local taxpayers and boosting the retirement income socks Illinois taxpayers.  Guilty as charged.  So what’s the problem?

School boards negotiate the teachers’ contracts that spell out end-of-employment salary boosts.  School boards agree to administrator salary increases.  The Teacher Retirement System (TRS) spells out the rules for the penalty school districts must pay if the end-of-employment salary boost exceeds 6% – presumably calculated to recoup the additional payout the employee would received during retirement.  Districts pay that penalty. Those are the clearly stated rules.

Don’t like the rules everybody has been following for almost a decade, Trib?  Then lobby to get them changed.  But don’t waste more ink describing how everybody is following the rules.

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One thought on “Pensions, Penalties, and Rule Followers

  1. Don’t forget that the rules were changed, before the 6% cap it was 20% and there were a few (very few) that took full advantage of the loop hole. They changed it to 6% because TRS had ample funds to cover those situations.
    The real problem with TRS goes back to Blagojevich. He had the State borrow from the Pension fund, because in 2003 it was solvent. How did we really get here, ask the contractors for the roads in Illinois where their money came from to build the six lanes of I55 near Springfield.The billions were spent on pet projects throughout Illinois by contractors that just happen to be major contributors to Blagojevich and other key politicians.
    The solution would be to pay back the money owed with interest. Not just the interest for a loan, but the interest the fund would have made.
    The question will be in a few years when inflation is back to the 20% level, as it was in 1980, how can teachers survive on a 3% cost of living increase. It would be helpful to have someone at the Tribune and the rest of Illinois really look at TRS.
    Thank God for the Illinois Supreme Court and the Constitution of the Great State of Illinois. Now the politicians have to live in the house they built.

    Like

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