End pension sweeteners; help save pension system
The pension-sweetening, end-of-career pay increases, received by school administrators and teachers across Illinois, put further stress on a weakened state pension system. We propose that Dixon School District administrators and teachers renounce them.
Comments (...)Contract negotiations between the Dixon Education Association and the Dixon School Board have taken place amid a worsening public pension crisis. The state of Illinois owes its five public pension systems about $200 billion – a staggering amount.
Illinois politicians, past and present, must shoulder much of the blame. For years, state contributions to the pension system were delayed or underpaid, at politicians’ behest, while teachers and other public employees continued to make contributions.
Another culprit, however, is a law that allowed school districts to grant end-of-career, pension-sweetening salary increases. The 6 percent salary hikes, granted for up to 4 years at the end of a certified employee’s career, provide an incentive for the employee to retire early because pension amounts are based on a person’s pay.
While the program opened positions for younger, less-expensive hires, the unintended consequences to the pension system have been financially stressful, to say the least.
Artificially inflated pensions for administrators and teachers are a problem that should be addressed.
The Dixon Education Association, in a statement, took the school board to task for giving its superintendent, Michael Juenger, such a pension-sweetening, end-of-career contract.
We quote from the DEA statement:
“Why would the Dixon Board of Education … in 2011 offer the superintendent a 4-year retirement package with a 6 percent raise each year after only serving ... the Dixon community for 2 years? In 2012-13, the superintendent has a salary plus pension contribution of $190,096. Next year, his salary is 6 percent more, or an additional $10,112. When he finally retires in 2015, his salary will be approximately $213,592. In the 6 years of working for the district, he will have amassed over $60,000 in raises from the district.”
A good question, indeed.
Juenger works for a Board of Education that wants Dixon teachers to accept the elimination of their end-of-career, 6 percent salary increases, that are made for up to 4 years.
Dixon teachers have rejected that proposal. They want to keep the pension-sweetening program in place.
We again quote from the DEA statement:
“The Board has proposed to eliminate the entire retirement article in the teachers’ contract. Therefore, teachers who have been loyal to Dixon with 20+, 25+, 30+, 35+ years of service to this community would not receive a retirement package.”
We note that the highest salary for a current Dixon teacher is $76,768, not including benefits, and the lowest is $31,574.
In this matter, we believe each side is right.
Teachers are correct to question a superintendent’s pension-sweetening package.
The school board is correct to question the teachers’ pension-sweetening package.
We question both expensive incentives, which, duplicated at hundreds of school districts across the state, have worsened the pension crisis.
Here’s our suggestion.
To Superintendent Michael Juenger, we propose that you renounce your 6 percent salary increases for the remainder of your contract.
To Dixon School Board members, we propose that you end your practice of granting 6 percent, end-of-career salary increases to any other administrators, now and in the future.
To the Dixon Education Association, we propose that you give up those 6 percent, end-of-career salary increases that were part of previous contracts.
By doing so, school administrators and teachers will win tremendous credibility among taxpayers, very few of which receive such generous retirement incentives.
School administrators and teachers will also set an example for others across the state who are concerned about the pension crisis. Here is a responsible way for school districts to lessen the pressure on the public pension system and, one would hope, improve its financial prospects.
The current path for Illinois’ public pension system is unsustainable. As time goes by, there may not be enough money for administrators and teachers to be assured of receiving their full pensions.
Remember that House Speaker Michael Madigan wants local school districts to take over the state’s share of payments into the pension fund for local teacher and administrator retirees. As a result, people across the region would pay higher property taxes.
A common-sense, reasonable response to the pension crisis must start somewhere.
Let it start in Dixon.
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I leave you with this quote (can you guess what year it was made?)-- "“Of principle concern to the commission is the accumulation of large unfunded accrued liabilities resulting for the most part from the inadequacy of government contributions in prior years to meet increases in costs due to the upward trend in salary rates and large additions to the membership of the funds.” -- by the Illinois Public Employees Pension Laws Commission to Gov. William Stratton ... in 1959 (54 years ago, before I was born). |
