Illinois school districts are slashing budgets, teachers, programs and in some cases, closing schools. A conservative think tank called the Illinois Policy Institute says districts should require teachers to pay toward their pensions, instead of having the district and taxpayers, pick up the tab.
“Its called the pension pick-up. Most people don’t know about this. It’s a hidden little secret that nobody wants to talk about,” said John Tillman, head of the Illinois Policy Institute out of Chicago.
“What’s happening in these local school districts, in Moline for example, is the school district is paying the employees share, the teachers share, so the teachers are actually paying zero towards their own retirement. The taxpayers are paying all of it,” Tillman said.
Tillman says it’s the policy in about 48 percent of school districts in the state.
The Moline School District has picked up the 9.4% teacher’s share of their annual retirement contribution since the late 1970′s.
“In this district, teacher’s retirement contributions are covered as part of the collective bargaining agreement, as part of the overall compensation package for teachers. It’s not necessarily the case in all districts, but in this district it is the case,” said Superintendent David Moyer.
The cost of the pension pick-up in Moline is more than 3.9 million dollars.
“Think about the budget deficit in Moline, it’s about four million dollars. If they simply stopped picking up the teachers pension payment they could balance the budget the teachers could put a little skin in the game,” said Tillman.
That kind of talk infuriates Jeff Conrad, with the local branch of the Illinois Education Association.
“That’s part of their compensation package. This is a Moline contract where the employees in the interest of saving, took no pay raise this year. There was no pay raise for teachers in Moline,” Conrad said.
Teachers don’t receive or pay into Social Security. Their defined retirement benefit is based on the average of their salary the last four years on the job. The figure includes the added 9.4 percent.
Superintendent Moyer says the pension pick-up is a contractual matter between the union and the school board.
“Right now, we’re looking at significant personnel reductions so in a way, one way or another, our overall compensation toward employees is going down,” Moyer said.
“We recommend teachers should start paying for their own retirement with their own paychecks for their own share and the next time these contracts come up, those teacher’s pick-ups should end,” said Tillman.