Unless reformed, the teachers’ retirement system could eventually run out of money and be unable to pay the benefits promised to retirees, while making it more expensive for teachers to live in Illinois.
For example, the Illinois Education Association’s main resource for teachers is outdated explanation of the retreat which was released in 2012. It focused primarily on retirement proposals drafted almost a decade ago and before bipartite legislation was passed by the General Assembly, which was later overturned by the Supreme Court of ‘Illinois.
What EIAs lack information on pensions?
Any mention that the teachers’ pension system might run out of money. Or any mention that it’s the public pension crisis that’s driving Illinois’ sky-high property taxes, which are the second highest in the country.
In other words, there may be no more money for young teachers when they retire. And meanwhile, the broken system makes their life here more expensive.
âNow we have huge teacher shortages because salaries are low in Illinois for educators and due to the pension crisis the state can’t even promise it will have the money. to support teachers who are already retired. It is decimating the field of education, âsaid a retired special education teacher. Deb Roti noted.
Illinois teachers’ unions must be honest with their members and support common sense reforms which are best for all Illinoisians.
In the meantime, teachers should contact their legislators and urge them to support a pension amendment in 2022 that will better protect their pensions.
The teachers’ pension system could run out of money
The teachers’ pension plan is not 38.6% funded.
But what does that mean?
Financial experts generally recognize a pension funding ratio of 60% or less so deeply troubled and 40% or less as a point of no return. This means that it may never recover without significant structural changes.
In other words, TRS is at the point where the fund will eventually run out of money and be unable to pay the promised benefits to retirees, in the absence of reforms.
Of course, unions have a the story to advocate for an increase in taxes to deal with the pension crisis. But more than 25% of state revenues already go to pensions and retiree health care. It should double to fund promised benefits at current levels.
Not to mention that teachers would also be affected by any tax increase allegedly intended to save their pensions.
Currently, some teachers hired on or after January 1, 2011 are subsidize pensions for teachers hired before that date. This means that younger and more recently hired teachers are at the greatest risk of losing their benefits in the event of insolvency. unless there are reforms.
Public pension crisis drives property taxes, making it more expensive for teachers to live in Illinois
Illinois is home to the second property taxes in the country and double the national average. The state-wide median property tax rate is 2.27%, residential property taxes having increased 83% since 1996.
The main driver increases in property tax: public pensions.
In recent years, cities in Illinois have been forced to either lay off current workers and thus deteriorate services to residents, raise taxes or both face the cost of these pension systems.
And the combination of higher taxes and a deterioration in services is probably a major reason Illinoisians fled to other states.
In other words, it’s just too expensive to live here.
And this also applies to the educators who live and teach here.
Teacher unions should support pension reform
It does not matter that there is a constitutional provision protecting public pensions if there is no more money to finance them.
Any realistic plan for the recovery of the State’s finances must start with a constitutional amendment enable reforms that make the pension system more viable and affordable for taxpayers. Illinois Institute of Policy ““Shelter from all responsibility” the pension reform plan would do exactly that while 1) preserve the benefits acquired by public retirees and 2) protect them from the prospect of insolvent pension funds.
Teachers – especially those hired on or after January 1, 2011 – should contact their unions, telling them to be honest with their members.
They should also contact their legislators, urging them to support a pension amendment in 2022 that will better protect their pensions.
Illinois educators deserve to know their pensions are in jeopardy – not because of potential reforms, but not to do something before it’s too late.