Today Crain’s Greg Hinz quotes the Civic Federation’s Larry Msall.
“The state cannot afford to be picking up the cost of increased teachers’ pension benefits when it is already struggling to adequately fund its pensions,” Civic Federation President Laurence Msall told me.
Is that what happened last week? Did my teacher retirement pension benefits just increase? Did anyone’s benefits increase above what was already due us?
Let’s take a quick step back to the last year of Governor Rauner’s term. For three years there was no budget. And then there was.
In the final moments, when nobody was paying attention – including the state’s teacher unions – the Democratic Party legislative leaders snuck in language that replaced a 6% pensionable cap on teacher raises with a 3% cap.
Any district that gave even an individual teacher more than 3% was penalized with the actuarial cost of it to TRS. This was all a school board needed to hear to keep teacher raises low.
Under the new law, the cap is raised back to the prior level of 6 percent. That means a person’s eventual pension can be raised more than 24 percent if they get the 6 percent each of their last four years of work and the raises compound.
Without going through all the mathematical calculations that Illinois teacher pensions are based on, the claim of an increase of 24% is a total fabrication.
It does not translate to a 24% increase in teacher pension benefits.
And please, Greg Hinz. Show me a school district in which teachers are getting four years of 6% raises.
But it doesn’t matter. Greg Hinz and Larry Msall would complain if we got a dollar more.
I’ll repeat what the pension problem is again just for grins. Trust me. Nobody in power will listen to the following:
The state’s $140 billion pension hole is from decades of a failure to pay what was owed.
It is not a benefit problem.
The benefits paid to retirees represents a tiny portion of what the state now is required to pay.
Most of it is interest on the debt.