10 Things You Probably Don’t Know About IL State Pensions.

 1.      Taxpayershave contributed more, not less, than the 1995 Fifty year pension funding law required.

Most people are familiar with the 1995 pension funding law that set up a schedule of payments that would result in 90% pension funding by 2044 for all the state pension systems. The schedule of state payments given to us in 1995 has been exceeded. So why are we being told we have to pay more when we have already overpaid?
See “Pension Crisis: Politicians and Unions Lied To Us in 1995 and Have Been Lying to Us Ever Since.”

2.      Since 2001 taxpayers have contributed 230% more than teachers to the Teachers Retirement System.

The most vociferous group in demanding more from taxpayers are teacher unions and their members. Hardly a day passes without a strident claim by a teacher or union honcho or one of their many political lackeys that the taxpayer (AKA the state) has not made their contribution while the dutiful teachers always make theirs. Good job by the unions convincing their membership but unfortunately for them it is patently not true.
“Taxpayers Have Contributed 230% more than Teachers Since 2001”.

3.      Less than 1% of state retirees worked 40 years.

If you work in the private sector from age 22 to 62 and retire on early Social Security at a maximum of $22,000 you will have worked 40 years. It is extremely rare for state workers to work that long in spite of the large pensions. In fact the Top 100 Pensions average only 31 years work in IL for their average $227,000 pension. And educators are not the only employees with a good deal. Most state employees (SERS) who work at least 40 years will have retirement income greater than their final salary take-home-pay (pension plus Social Security).
See Chapter 2.8 “Average State Pensions Are Far Above Average”.

4.      The supposedly “modest” average state pensions are worth 4 times Social Security.

The word “modest” is used by media, union members and politicians to describe IL state pensions in order to minimize the huge cost to taxpayers. But when you look closer you find that the average state employee works less than 25 years and in more than half the cases only 9 months a year (educators). So why are pensions worth 4 times Social Security for 9-month employees working partial (25-years) careers considered “modest”? The highest pensions are 8 to 10 times Social Security.
See Chapter 2.8 “Average State Pensions Are Far Above Average.”.

5.      State retirees have used more than 132,000 years of sick-leave credit to receive extra pension without actually having to work for it.

Employees in the state pensions can accrue sick leave at the rate of 10 to 15 days per year and use them as “work years” when they retire. In TRS a “work year” is only 170 days (34 weeks) so in about 20 years or so a teacher will have the maximum two years already accrued well before they retire. In some school districts sick days are given away or can be purchased outright at the time of retirement for $20/day. I show an example of a teacher who paid $6,800 at her time of retirement for 340 days (2 years) sick leave credit that boosted her pension by $4,800/year.
See Chapter 1.4
“Retired Teachers Getting Pensions for 157,700 years They Never Worked”.

6.      Over 44,000 retirees have annual pensions greater than their total contributions over their entire career.

This is an indication that employee contributions are much too low. As a comparison, the maximum Social Security at age 62 is $22,000 after about $130,000 in employee contributions over the recipient’s career. So even if you lived to age 125 with cost-of-living-adjustments your annual Social Security would never exceed your contributions.
See Chapter 1.8 “Should Public Employees Have pensions Greater Than Their Career pension Contributions?”

7.      The reason TRS pension liability is so high is because teachers are vastly overpaid compared to adjoining states.

The way IL pensions are calculated a doubling of salary results in a doubling of pension payments. The top teacher salary in IL for 2011, $203,000 for a suburban Phys-ed teacher, is $108,000 more than the top teacher in Kentucky. It is also $95,000 higher than WI, $92,000 higher than IA and $83,000 higher than MO highest teacher salaries.
See Chapter 4.12 “Why Is Illinois’s Top Teacher salary $108,000More Than Kentucky’s?”

8.      If IL teachers had the same salary and pension schedule as Wisconsin we would save more than $4 billion/yr. enough to make the annual pension payment.

WI teachers (and administrators) have much lower salaries than their IL peers and their maximum pension is not reached until age 65. If the same rules applied to IL we would save $4 billion/yr. even including the Social Security cost associated with WI.
See Chapter 4.5 “Wisconsin: Top Teacher Salary $89K Less Than IL To Teacher Salary” and Chapter 4.6 IL School Administrators Make 67% More than Wisconsin’s”.

9.      If the pension rules in effect in 1970 when the “Pension Guarantee” was added to the state constitution were still in effect there would be no unfunded pension liability.

In December 1970 the phrase “shall not be diminished or impaired” was added to the IL state constitution guaranteeing pensions for state employees. One month later in January 1971 new laws were passed increasing pension benefits by 11% to 53%. Boy, that didn’t take long.Pension benefits were increased by another 17-30% in 1998.
See Chapter 1.1 “IL Pensions: More than 130 benefit increases since 1970 are the major cause of unfunded liability.”

10.  Teachers’ unions have given IL politicians of both parties more than $50 million in contributions since 1995.

Unions give politicians $10’s of millions and get $10’s of billions back in increased pension benefits. Rod Blagojevich gets $1.8 million from teacher unions then pushes $10 billion pension bond thru the legislature.
See Chapter 2.6 “Teacher Unions Give Politicians $10’s of millions in Contributions, Politicians Give Teacher Union Members $10’s of Billions in Benefits.”

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Comments

  1. Sue Dunn says:

    I am an R.N. and work in the OR. I wish that I had such great deals. I save lives. I love my country and admire our founding fathers. Whom do they admire? Their pocket book?

  2. We can continue to play the blame game or we can sit down and fix the problems. The first issue needs to be putting language in any law that STOPS the politicians from using the pensions funds as personal piggy banks and stops pension holidays. There is no point in “reforming” a system and throwing more money into it if politicians are allowed to just do with it as they please. Once the money is protected from the greedy hands of politicians and back room deal makers we can discuss fixing the mess.

  3. Roeser has long crusaded against taxes and government spending, yet his company, Otto Engineering has been awarded 223 government defense contracts since the year 2000. These contracts have netted Otto Engineering a total of $3,955,227 acccording to Governmentcontractswon.com.

  4. Have you noticed that they delete comments that they don’t like? Now, that is Democracy at work!

  5. Most teachers have master degrees. To say that they work nine months a year…..probably not the ones high on this list. I know several PE teachers on the list are mulitsport coaches who work 6 days a week and most of the summer. This is all included in the salaries. The ones to go after are the corp exex making in exess of 5 mil a year and paying 2% income tax.

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