The financial shock of making newly-hired teachers pay into Social Security and allowing them to be eligible for benefits would affect all current and retired teachers.

From Glen Brown’s blog.

From the Illinois Teachers Retirement System.

“Issue: Requiring newly-hired Illinois teachers to become part of Social Security would help ease the burden on TRS, lower the state’s contribution to public pension systems, help ease the long-term financial problems facing Social Security, and create more income stability for retired teachers.

“Discussion: Making newly-hired teachers pay into Social Security and allowing them to be eligible for benefits would affect all current and retired teachers. Illinois teachers have never been part of the Social Security system. Most teachers rely almost solely on a TRS pension during retirement. Active teachers contribute 9.[0] percent of their paycheck to help fund TRS and school districts contribute 0.58 percent of every teacher’s salary to the System. Last year, all told, teachers contributed $917 million to TRS and school districts contributed $155 million.

“For new teachers to become part of Social Security this scenario would mean a mandatory 12.4 percent payroll deduction split evenly between the member and the employer, which in the case of Illinois teachers is school districts and state government. Teachers would still be required to contribute 9.[0] percent of salary to TRS.

“For school districts, the cost of teacher pensions would immediately rise by a considerable amount. Instead of contributing 0.58 percent per new teacher, every district would have to contribute 6.2 percent per teacher. It is estimated that this increased cost would equal $41 million for Illinois school districts in the first year and more than $2.4 billion over 10 years. Plus, districts would still have to contribute 0.58 percent for each participant in the current system.

“Finally, a 1999 study by the General Accounting Office found that adding teachers and other public employers from around the country who are not currently in Social Security would create, at best, a temporary surge in revenue for Social Security. Over the long term, adding teachers to Social Security would only increase the System’s total obligations and deepen the long-term funding problem.”

3 Replies to “The financial shock of making newly-hired teachers pay into Social Security and allowing them to be eligible for benefits would affect all current and retired teachers.”

  1. Glen Brown has figured out one of two things.
    Either:
    1. Glen alone figured out what no one in IEA/NEA, TRS, the Illinois Senate, the Illinois House of Representatives, the Governor’s Office, and every major news source in Illinois could figure out before, during and after these bills were passed.
    -Or-
    2. We have been betrayed and swindled.
    Of course there is the possibility that a combination of the two occurred. Only the people in those dark back rooms can tell us about what those combinations entail and who they enrich.

  2. I wish I had paid into Social Security as a teacher & that our state didn’t have the offset (WEP, GPO) that it does. My second jobs that I held as a teacher (earning not enough each year for a ‘significant’ amount to counter the offset) made me eligible for SS benefits, but the offsets have made the amount I receive from SS almost negligible. Oh well, I loved my second jobs!!

  3. Correction: I inadvertently included the Illinois Teacher Retirement System (TRS) in groups who could not figure out how negatively so many of us will be impacted by the recent bills passed in Illinois. I sincerely apologize.

    Glen Brown, in his usual methodical manner, put together information from TRS and other sources regarding the actual negative impacts of these bills. Glen connected the dots for us.

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