Why Illinois teachers should reject new pension deal

Why Illinois teachers should reject new pension deal

Madigan’s new pension “fix” does nothing to address the problems with the current pension system. Here’s another reason why Illinois teachers should urge their legislators to vote “no”:  the new pension bill does nothing to address the unfair distribution of pensions under the Teachers’ Retirement System, or TRS. Amazingly, the pension a teacher in TRS...

Madigan’s new pension “fix” does nothing to address the problems with the current pension system.

Here’s another reason why Illinois teachers should urge their legislators to vote “no”:  the new pension bill does nothing to address the unfair distribution of pensions under the Teachers’ Retirement System, or TRS.

Amazingly, the pension a teacher in TRS receives has nothing to do with the amount of money they put into the system.

Look at two pensioners from two different districts, Charles Collins of Edwards County CUSD 1 and Bonnie McLeary from Rich Township HSD 227. Charles started working in 1968, Bonnie in 1971. Both put in 33 years of service. Charles paid $3 less into TRS than Bonnie did – $132,345 and $132,348, respectively. And yet Charles is expected to receive $1.52 million less in pension payouts over his lifetime than Bonnie – $1.1 million compared $2.6 million.

How does this happen?

TRS pensions are based on the last four years of a pensioner’s salary, not the average salary over his or her career, or the amount of money he or she put into the system.

Having a retirement system that isn’t tied to contributions is not only mathematically troublesome, it is deeply unjust.

That’s why it makes sense to have a retirement system based on a 401(k) model. This model allows workers to control their own destiny by taking control out of the hands of politicians. This system also ensures that workers’ contributions are directly linked to their retirement income.

It’s the only fair way to fund retirements.

 

Want more? Get stories like this delivered straight to your inbox.

Thank you, we'll keep you informed!