Via David Stockman’s Contra Corner
Why Illinois Is Bankrupt: 6,000 Teachers Get Pensions Of $100,000+
by NCPA
From 2013 to 2014, the number of teachers receiving six-figure pensions in Illinois increased by 24 percent. Today, 6,000 retired Illinois teachers are collecting at least 100,000 in annual pension money.
Yet, as Kelly Riddell reports for the Washington Times, if the Illinois Teachers Retirement Service (TRS) were forced to pay out the pensions it owes today, it would only be able to pay retirees 40 cents for every dollar. Indeed, the state’s pension fund is in trouble:
- According to a report from the spending watchdog group Open the Books, over 100,000 Illinois teachers had already broken even on their pension payments after just 20 months of retirement.
- Illinois taxpayers can pay up to $2 million per teacher per retirement.
- The TRS pension fund is underfunded by $54 billion, according to the Illinois Policy Institute.
- By 2029, the fund could be entirely broke.
TRS is the largest pension fund in the state. According to Riddell, Illinois legislators have continued to underfund TRS in order to free up funds for spending elsewhere. Yet, over half of Illinois teachers are retiring before the age of 60, and many teachers are making twice the amount they earned while they were actually employed. For example:
- Sandra Renner served as the superintendent in the Butler School District in Illinois. During her last four years at her job, her salary rose by 31 percent to $288,240. As a result, her starting pension was $210,480. She will receive pensions higher than her salaries for all but five years of her time in the workforce.
- Administrator Mohsin Dada saw his salary rise from $156,160 to $358,750 during his last year in his job. As a result, his pension was $254,700.
In the TRS plan, teachers are guaranteed a 3 percent annual cost-of-living adjustment, not connected to inflation or adjustable based on budget crises. Moreover, the adjustments are not capped as they are in Social Security. As a result, the state’s public employees will see an average $1,906 cost-of-living adjustment in 2014, nine times the amount a Social Security beneficiary will receive to account for cost-of-living increases. According to Laurence Msall, president of the Civic Federation, the cost-of-living provision is one of the central reasons the state’s pension costs are so expensive.
Another problem in Illinois is “pension spiking,” in which educators’ salaries rise immediately prior to their retirement.
- For example, Open the Books discovered teachers in the Hinsdale school district were receiving a 24 percent salary increase during the last four years of their careers, boosting the value of their pensions.
- Unions often make salary spikes a part of salary negotiations. School districts are only on the hook for these payments for just a few years, while taxpayers bear the real financial burden: the resulting higher pension bill.
The Illinois legislature passed pension reform last year, which included salary caps and a cost-of-living adjustment based on inflation, but labor unions challenged the reform in the courts. Riddell reports a judge issued a temporary injunction against the law in May. According to Ted Dabrowski of the Illinois Policy Institute, if the court rules pension reform unconstitutional, taxpayers are going to face large tax increases.
Source: Kelly Riddell, “Generous teacher pensions continue as Illinois’ financial crisis worsens,” Washington Times, September 1, 2014.
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This is a syndicated repost courtesy of Daily Policy Digest. To view original, click here.
I don`t care as long as I don`t have to pay for the shortfall. They get what they deserve for raping the taxpayers.
OTC, they don’t care, either. In fact, when it ends, 9 out of 10 recreants will be quoted as saying, “it was a good ride.”
“For nothing is hidden that will not be made manifest, nor is anything secret that will not be known and come to light.”
(Luke 8:17 ESV)
Holy Dog !!
Those salaries are off the scale !
Given what I see of teacher competencies every day (most don’t even know what a purchase order is) you could cut their salaries by 60% to match their real world skill bases.
These quoted salaries are politician level !!
Tax increases….that’s rich!
From whom?
How many businesses are left that pay taxes?
And this is today’s values, which are 100% attached to Wall Street.
Wonder how much taxes are going to have to increase once the Dow drops?
Wonder how many people are going to just quit paying and stay until they are evicted off their own land?
Wonder why people still don’t believe Warren Buffett when he said Americans were going to wake up sharecroppers paying both China and WDC?
This is how it starts. What fun.
It is amazing that these educators and school administrators could not do the simple math to determine if all of these pension schemes were sustainable. Of course they didn’t care as long as they got theirs first. Hooray for me and the hell with the rest of you. Bloody idiots deserve what they eventually won’t get.
After 35 years of teaching, my pension started at $26K and with COLAS over the last 14 years is now up to $30K. I don’t get any SS, and I consider myself blessed. I must have been one of them dumb teachers.
DaveL
You should have taught in Democrat state like Illinois rather than a Republican state like South Carolina.
And Admin scolds me for my “gold-plated” pension, which is 40% of the 100K mark. 24 years service. 2 year-long combat tours. 13 moves to wherever.
Sorry, I earned it. Every penny.
After 25 years I got a pittance of a pension, my only comfort is I still have my looks. OK, I still have my teeth. We were walking around the 3rd street Promenade when I spotted a homely old woman looking at me I smiled her and told my wife, I have to be nice to my fan base.
Admin, is there a way to link 4chan so these guys will come back? That way folks can have both heads engaged and aroused intellectually.
@DaveL and SSS
Once upon a time, our currency was not being debased and US citizens were able to save for their retirement. Those days are gone. So are secure pensions, public and private alike.
Ignore Delphi Corporation, Eastern Airline, TWA, etc. at your peril. Focus research on SEIU pensions for teachers,firefighters, LEO, in Detroit, Birmingham, on and on. SEIU drones are not exempt from accounting facts and consequences. Unlike politicians and unions, Numbers don’t lie. No one is exempt from consequences of economic and fiscal insanity. The dominos are falling in a very predictable order, despite claims of “Who could have seen this coming” BS. Too few are paying attention or taking protective stance against what is sure to affect their financial security. Jim Quinn has been telling us about this, warning us about consequences of dishonest dealings.
Just one example:
Alabama Town’s Failed Pension Is a Warning
http://www.nytimes.com/2010/12/23/business/23prichard.html?adxnnl=1&pagewanted=all&adxnnlx=1410253924-SrxsMr5GR40d8D/exqk6ag
This scenario is happening all over USA. MSM has done a very good job at suppressing bad news. When California has 10 cities in bankruptcy, and the pensions of teachers, LEO, Firefighters, etc. are in jeopardy, what does the rest of USA fiscal health look like? Do homework, but be prepared to swallow the red pill and protect yourself against what is about to affect you in ways you have never before imagined.
Admin, believe it or not, it was in MA. I spent part of my retirement in SC
I often wonder if my wife should simply resign (she’s far short of being able to retire, having taken 15 years off to raise our kids) in order to try to get at least her 9.4% contributions out of TRS before it collapses completely.
On the other hand, since she’s over 50 and not bilingual, she’ll probably be fired in a year or two anyway. For the uninformed, “tenure” is a distant memory. The moment the school district decides they want a younger/cheaper teacher, or one that speaks Spanish, you can be let go. For better or worse, the unions have had their teeth completely pulled except perhaps in places like Chicago.
I figure she can hang out her shingle offering to teach people who don’t want to home school but also no longer want their kids sitting next to children so profoundly handicapped that the teacher’s entire day is absorbed trying to simply keep order.
All three of our sons when through the school where she teaches, but we agree that if our kids were still young we’d pull them. The public school’s newest “New Math” is putting profoundly handicapped kids in with the regular kids, and the former cause the education of the latter to grind to a halt. Why anyone would let their normal kid sit in a classroom full of IQ 65, autistic or 3 years behind grade level kids is beyond me.
Schools are afraid of getting sued for “separate but equal” education of (frankly) cognitively disabled students, so they plunk those kids into the mainstream, knowing full well that those kids cannot function in the normal classroom, will absorb 100% of the teacher’s time, and leave the regular kids to fend for themselves.
It seems to me that some parents of “regular” kids should be suing the shit out of the schools for failure to provide an environment conducive to “regular” kids’ learning.
As it is, increasingly the only kids left in public school are profoundly handicapped and those whose parents only want their kid babysat.
@Gbyerley,
I couldn’t agree more.
If we dig deep enough, the wellspring of this epic disaster is dishonest money, and only a sick society besotted with “Bread and Circuses” ignores such a profound con game.
Social Security is a scam, Obamacare is cementing in place the corruption of medical services instilled by Medicare/Medicaid, and every pension fund in America is built on a foundation of lies and absurd mathematical exponents.
I fear greatly for us all.