The Continuing Story of Illinois Teacher Retirement…
Things are beginning to look even worse for Illinois teacher retirement. Not just for current teachers looking to the future and a potentially diminished retirement but it is starting to look like teachers who have already retired may be facing some form of reduction in pension benefits.
This isn’t simple speculation, this warning has come from the top of the Illinois TRS (Teachers Retirement System). In a memo to the board Dick Ingram, the director of Illinois TRS, stated that current and/or future retiree benefits and also that there is potential for the system to become insolvent in 15 years.
The state has shorted the fund for many years, contributing less than their required amounts and that was a significant pillar in the Illinois pension funds being underfunded into the dozens of billions of dollars.
Unfortunately, even though the state owes almost unfathomable amounts of money to the Illinois Teacher Retirement System pension fund, there are other crushing financial albatrosses that exist in our state. The state has unpaid bills all over the place and soaring healthcare costs on top of their unfunded pension liabilities ($85 billion in total among all the different state pensions).
Governor Pat Quinn recently stated that the state of Illinois needs a better budget and specifically mentioned Medicaid restructuring as well as strengthening the pension systems. Even though a few weeks ago Quinn said that “everything is on the table” when it comes to improving the financial situation of Illinois, he has not seriously entertained a progressive state income tax system.
Instead he has proposed cutting state contribution to retired teacher health care plans. The main problem with that (from a financial standpoint) is the cutting those health care benefits saved the state around $90 million while a graduated income tax system could create over $1 billion in additional revenue (while also reducing taxes for a whopping 94% of Illinois residents).
The Illinois Policy Institute has maintained that pension reform is a must. And they mean pension reform across the board: for public employees & for teachers alike. Retired teachers are already on stringent, fixed income and now on top of that, the state is seriously exploring taking away what they’ve worked so hard serving the public to attain.
Problems also exist beyond teachers getting their fair retirement benefits, but there is also some concerns that in the future pension payments will become so significant it will eat heavily into school funding. That would be the ultimate double whammy for teachers if the state took away a chunk of their retirement funding as well as decreased the funding for the schools themselves & thereby lowering the quality of education for the students.