Tags: Illinois | teachers | pensions | salaries | fiscal | crisis

Report: Illinois Teachers Paid Well Despite Fiscal Woes

By    |   Tuesday, 02 Sep 2014 01:44 PM

Illinois has the lowest credit rating in the nation, but that has not prevented the state's Teachers' Retirement System from doling out hefty pensions to an increasing number of teachers, according to a new report by a government spending watchdog.

According to Open the Books, approximately 6,000 retired educators this year will receive pensions valued at more than $100,000 annually, a 24 percent increase over last year. 

OpenTheBooks.com is the education project of American Transparency — a nonprofit, nonpartisan, tax-exempt organization.

Collectively, their annual payments nearly equaled $700.3 million, the report notes.

Those figures are not surprising considering more than 70 cents of every new education dollar goes to teacher retirement costs and by 2029 the state will spend more on retirement costs than on aid to schools, reports the Illinois Policy Institute.

Last week, the Teachers' Retirement System (TRS), Illinois' biggest public pension fund, reported that it posted an 18 percent return on investments in fiscal 2014, which is well beyond its assumed annual rate of 8 percent.

The TRS said in its Aug. 26 filing that as of June 30 its assets totaled $45.3 billion, up 14.9 percent from the end of fiscal year 2013.

"For most school districts, pension payments are one of the top five annual expenses," Adam Andrzejewski, founder of Open the Books, said in a Washington Times interview.
"Are we going to educate children or provide lavish lifetime benefits for administrators and teachers? There’s not enough taxpayer money to do both." 

Union representatives, however, openly defend the large pensions.

"It should be remembered that Illinois TRS members are not in Social Security," Charlie McBarron, a spokesman for the Illinois Education Association, told The Times. "Their pensions are, for most, their life savings."

The lavish spending, the report found, was not limited to generous pensions. Of 162,960 active educators, 16,257 bring in more than $100,000 per year.

And among the most highly compensated 406 administrators, they out-earned 49 out of 50 governors ($179,000), and over the last five years, the number of employees earning a six-figure salary increased by 69.5 percent, Open the Books reported.

While unions have no concerns about the spending habits of the TRS, legislators acknowledge the gravity of the pension crisis in Illinois, and last year took action to reform the system.

In December 2013, the Democrat-controlled state Legislature passed, and Democratic Gov. Pat Quinn signed, a pension-reform bill that was estimated to save $160 billion over three decades.

The reform, in part, would achieve those savings by cutting retiree cost of living increases, raising retirement ages, and limiting the salaries on which pensions are based, reports ABC7 Chicago

However, a coalition of labor unions filed suit challenging the constitutionality of the reform law, and in May a judge placed an injunction on the reform, which was to take effect June 1, reported Crain's Chicago Business. 

According to the Illinois Policy Center, for every $1 billion of new borrowing, Illinois taxpayers are on the hook for $16.4 million in additional interest payments compared with AAA-rated states. 

In March, Moody’s Investors Service downgraded Chicago’s debt to just three notches above junk. The only large U.S. city with a lower credit rating is bankrupt Detroit. 


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Illinois has the lowest credit rating in the nation, but that has not prevented the state's Teachers' Retirement System from doling out hefty pensions to an increasing number of teachers, according to a new report by a government spending watchdog.
Illinois, teachers, pensions, salaries, fiscal, crisis
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2014-44-02
Tuesday, 02 Sep 2014 01:44 PM
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