Illinois found flunking when it comes to teacher pensions
Illinois is part of a large class of states failing their teachers by virtue of a flawed retirement system, according to a recent Bellwether Education Partners survey.
Illinois was among 42 states, along with the District of Columbia, slapped with an 'F' grade based on current operations. Only three states scored as high as a "C," and the six others barely passed muster with "D" marks.
Researchers said the grades were based on individual state efforts and policies rather than any overriding expectations. Among the factors considered were whether a state's teachers are earning sufficient retirement benefits and if those benefits are set up to follow them wherever they go.
Chad Aldeman, principal at Bellwether, told the Sangamon Sun that the majority of states have created a situation that does not provide sold retirement benefits because they are so burdened with debt.
lllinois is a perfect example, Aldeman said.
“It’s a tough issue,” he said. “The teachers did nothing wrong. It’s more a case of the state and politicians over-promising, and now they’re left with the mess.”
Aldeman said the findings indicate that political gains were often more pressing that the best interests of the people.
“The question now is how do you think about structuring a new system that’s not driven by political forces,” he said.
Researchers found that teacher retirement packages cost states and districts more than $50 billion annually, even though half of all new teachers will never qualify for such benefits.
In Illinois, only 49.9 percent of teachers will ultimately satisfy the vesting requirement of 10 years on the job to earn a minimum pension, according to the study, which also estimated that only 20 percent of teachers will break even from the state retirement system -- meaning reach a point at which the value of their retirement package exceeds their own contributions to the plan plus interest.
Overall, approximately 80 percent of all teacher pension contributions go toward debt, Aldeman said.
“Every year the state has to pay a lump sum and every year politicians have to consider what things take precedent,” Aldeman said. “That’s a perfect recipe for what we see happening now with all the pension debt. Without dramatic reforms, we will continue to see this happen.”