Unused sick days add big payout for retired public school teachers

For most Illinoisans, paid sick days count on a use it or lose it basis. But that

by Jonathan Ingram

For most Illinoisans, paid sick days count on a use it or lose it basis. But that’s not the case for the state’s public school teachers.

In Illinois, retired teachers get to count their unused sick leave as extra service credit toward their pensions. The state treats every day of this unused sick leave as an extra day spent in the classroom. And unlike other types of optional service credit, which educators can purchase from the state, teachers do not pay any member contributions toward their sick leave service credit.

A recent study of the Teachers’ Retirement System conducted by its actuaries showed that the amount of unused sick leave that retired teachers counted toward their service credit has increased steadily in the past decade. During the last five years, more than 80 percent of retiring teachers received additional service credit for their unused sick days. Among those receiving this benefit, the extra service credit averaged 1.84 years, up 61 percent from the last five-year study period.

So, what’s this worth? Imagine two teachers, identical in every way except unused sick time. They’ve each been teaching for 30 years, have final average salaries of $86,636 and retire at age 60. One has the average 1.84 years of unused sick time; the other has none. The difference in lifetime pension payouts is more than $115,000. When you consider that there are 91,000 retired teachers collecting a pension, that difference starts to add up.

Unfortunately, this is exactly the kind of pension sweetener that Constitutional Amendment 49 would have done nothing to prevent. When these provisions were enacted, they passed by margins far exceeding the supermajority called for in the proposed amendment.

The politicians hope taxpayers will believe that Constitutional Amendment 49 will fix the pension crisis. Don’t believe them. Only major reforms, like those heavily centered on defined-contribution plans and that tackle the automatic cost-of-living adjustment, can get the problem under control.

Calculation notes: The final average salary reflects the final average salary TRS reported for teachers who retired in fiscal year 2011 with 30 to 34 years of experience. The retirement age reflects the average retirement age TRS reported for teachers who retired in fiscal year 2011. Lifetime pension payouts reflect the payouts during the course of the annuitant’s life, with mortality based on the Social Security Administration’s actuarial life tables for a 60-year-old retiree. Annual pension payouts were adjusted for a 3 percent compounded cost-of-living adjustment.