Raises for teachers capped at 3 percent in last four years on the job

Raises for teachers capped at 3 percent in last four years on the job

Call it a perk, call it a pension spike — either way, it's been capped.

The $38.5 billion spending plan signed by Gov. Bruce Rauner on June 4 contains a provision meant to limit school districts' ability to increase teachers' pay in their final four years of employment — cutting allowable raises from 6 percent to 3 percent.

It's not the first time it's happened; credit a 2005 law for establishing the 6 percent ceiling in the first place. And, as an extra incentive for districts to avoid hefty pay spikes, the state said it would penalize districts that increase salaries by more than 6 percent by making them pay the cost associated with higher pensions.

Those who considered the pre-retirement increase a perk viewed it as a sort-of offset to the state's low teacher pay: a salary increase in an educator's final years meant an increase in pension payments after retirement.

Taking away that incentive is another blow to those in an already-struggling public education system, said local Illinois Retired Teachers Association President Linda Meachum.

"It's just another way to hit teachers where it hurts," she said. "It's not enough that they spend money on their own classrooms and that they're changing the retirement tiers. This is one more thing they can do to stick it to them."

Critics of the practice, however, argued that it burdened taxpayers by having them "bailing out the billions in pension-fund failures."

But one thing that critics and supporters of the practice could agree on is that the cap on pension spiking doesn't solve the bigger issues.

Chad Aldeman, a principal at Bellwether Education Partners, called the state's move reactionary and, in the scope of things, not a long-term solution.

"It is a response to the financial state the state is facing," he said. "I would rather see the state have a new retirement system in place."

Aldeman said the current teacher retirement system is "unfair." A small group of those in it, he said, would benefit exponentially at the end of their careers, but most teachers don't see that kind of pay off.

"There's lots of people who enter the profession and get very little," Aldeman said. "Some people stay around and get a lot. This is capping off the generosity for a small group, but it's not addressing the issue at large."

The issue at large is pension reform. The Teachers' Retirement System — the largest in the state — is, according to a 2017 Illinois Department of Insurance Report, underfunded by at least $71 billion.

Aldeman also added that Tier II teachers — those who started paying into the retirement system after Jan. 1, 2011 — have fed money into a broken system.

"At some point they're going to have to realize that pouring more people into this structure isn't going to work," Aldeman said. "Tier II is so ungenerous that, by 2021, the state is at risk of not meeting Social Security. They will have to revisit that pension system by 2021."

Regardless of the legislative solution, some people fear that the provision will dissuade others from becoming educators. Jim Reed, director of government relations for the Illinois Education Association, said it could have a "chilling" effect on the profession.

"I think people looking at the profession will see this as a way we devalue our profession," he said. "We seem to keep doing things that speak counter to all the rhetoric we hear about legislatures valuing public educators — they put in provisions like this that do just the opposite."

Sections (2):News, Local