Changes to Pension System Spell Uncertainty For Teachers
A recent report shows Illinois is facing a teacher shortage. But changes to teachers’ pensions — including cutbacks on the state’s share of contributions — spells uncertainty for anyone going into the profession.
When the Illinois General Assembly approved a budget last summer, they also agreed to cut back on about $500 million to the state's pension system. This might sound like a good idea if the money is allocated to pay for other needs in the immediate future. For teachers, however, it means the state might not be able to cover their pensions.
Richard Ingram, executive director for the Teachers' Retirement System, says these pension changes will only exacerbate the state’s teacher shortage. "Kids that are coming out of school today, that want to be teachers... are getting the message that hey--if you go and teach in Illinois, you can forget about the certainty of a future pension and you're going to overpay for it," he says.
Teachers contribute nine percent of their salary to their funds-- but only seven percent is used. The additional two percent is "subsidized" to cover some of what goes into Tier 1, Ingram says. This is money Tier 2 members will never see.
The teachers' retirement system is the largest of Illinois' five pension system. Together they totaled close to $130 billion in unfunded liabilities.