We Didn’t Cause the Pension Problem

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A lot of finger-pointing is going on in Illinois over the notoriously under-funded pension funds.  Just to set the record straight:

I didn’t go into teaching for the pension.  I don’t know anyone who went into teaching because they were going to get a good pension 37 years later.  We did it because we loved teaching kids.  I’ll bet $100 no kid right out college said, during an interview for their first teaching job, “So, tell me about the pension system.”

I didn’t go into teaching for the money.  I don’t know anyone who went into teaching because they wanted to make a lot of money.  My wife and I moved to Chicago in 1975 because this was the place where I found a teaching job.  I started at $11,500 per year.  I drove a school bus before and after school to help make ends meet.

The constitutional amendment guaranteeing state employee’s pensions went into effect in 1970.  Years before 99.9% of all the current educators began their career.  It wasn’t their idea to guarantee pension benefits – why is it a bad idea to do so now?

All educators paid 8% of what they were being compensated to TRS until 1999.  Then we paid 9% to TRS.  In 2005 we paid 9.4%.  Over the course of my career I paid over $300,000 into the pension system.  Using TRS’s reported investment returns, when I retired in 2012 my pension nest egg should have been about $716,000.  That’s without including any contributions from the state, which were inconsistent and underfunded.  All educators have paid what they owed.  We were not allowed to participate in Social Security.  Unless we put some of our salaries into a 403(b) account, this is all we have.

TRS states that our pension fund has $61.6 billion in unfunded liabilities – two-thirds of which is attributable to the state not paying what was needed to keep the pension fund solvent.

I get defensive when the media or people around me point their finger at teachers and accuse us of doing something dastardly.  We found a job that we loved.  We worked hard.  We paid our (TRS) dues each and every paycheck.  We worked under the assumption that the Illinois constitution protected our pension.  Why are we always cast as the bad guys?

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3 thoughts on “We Didn’t Cause the Pension Problem

  1. When I was elected the very first time, back in ’79, I went to my first IASB conference in Chicago. The big debate took place with Madigan as the speaker………board members asked these questions……1. why is Springfield passing unfunded mandates for schools?’
    2. why isn’t Springfield paying their part toward pensions?
    Boards have argued these points for over thirty five years, not asking for charity, just asking that the state do their part. Now they’ll pass the pension debt of theirs onto school boards/taxpayers. Why? Because they can……….

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  2. Having served back in the early to mid 2000s on a suburban Police Pension Board, I have a slightly different take on the underfunding issue. Back then the Fund I served was approximately 70% funded, and I caught lots of flak by going to every Village Board meeting and bringing up the underfunding issue – much of it from police officers who didn’t want their at that time massive amounts of overtime cut and pointedly reminded me that come the funding “drop dead” date, the Illinois Constitution would guarantee that they got theirs in full and the taxpayers would have to take it up the (fill in the anatomical word of choice). Back then the Illinois Department of Insurance was ready to enforce funding requirements…but the LEO majority of the Pension Board refused to request their intervention. So now that fund is only 45% funded and the staffing levels have been drastically cut…but heyya! They got lots of OT. What they don’t realize, is that if there is not enough money in the fund to cover their anticipated checks, Department of Insurance’s solution is to prorate.
    Was this the attitude of union and professional organization lobbyists, when pension holidays occurred? What about the rank-and-file? Where were your voices when private sector defined benefit plans were being gutted and destroyed? Looking at some of those public sector pension amounts, lots of prorating could be done before they approach maximum social security benefit levels.
    The bottom line is this: the majority of taxpayers in Illinois simply don’t have the funds to pick up this tab in its entirety. Sure, they may lose their houses, small businesses,etc., if they can’t pay…but they’ll leave, compounding the problem. Contracts are well and good, but in this case, if the dollars needed don’t come in, do the checks get cut for the full promised amount and some bounce, or does a realistic solution get forged that is fair to all (even if it means nobody is happy)?

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