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Teachers Fight Attacks on Pensions

Editorial Report by Corey Mattson
In the last few weeks, public school teachers throughout Illinois have stepped up efforts to defend their state pensions against attack. The pension issue was one of three that the Illinois Education Association (IEA) brought to representatives during their Lobby Day in Springfield on May 4th.

In Illinois, public sectors workers, including teachers, do not participate in the social security program of the federal government and must rely on their state pension for their retirement needs. Teachers are now worried about the pension proposal being considered by Illinois legislators, which erodes benefits and ultimately could spell the end of the state’s pension systems. They point out that the current crisis was not caused by public sector workers but was a result of the state consistently not living up to their funding commitments over the years.

The one plan that has floated around the capitol in the last few months looks particularly odious. Teachers would be given a choice between three unenviable options:

1) Massive Pay Cut — Teachers could continue with the same pension plan as before, with the same retirement age, but they would need to pony up more money. This would amount to a major pay cut. Currently teachers pay 9.4% of their paycheck for their pension; under these proposals, teachers would need to pay from 12% to 25% of their pay into the system.

2) Raising the Retirement Age — Under this option, teachers would pay 6% of their salary into the pension system, with the state contributing nothing, and the minimum age to collect pension distributions would raise to 67 years of age. In effect, the retirement age would be raised and benefits would be significantly eroded.

3) Reliance on the Volatile Market — The last option is for teachers to forgo the current ‘defined benefit’ pension plan, wherein retirement payouts are determined by a formula, and instead put their money (6% of paycheck) into a ‘defined contribution’ plan with a 6% match by the state. In defined contribution plans, such as 401Ks, payouts during retirement come out of whatever money was accumulated through market investments. The IEA points out that the pension system provides members with a better result with much less risk, and if members choose the competing ‘defined contribution’ option, it could erode the pension system to the point when it would not be viable.

The Illinois public sectors workers are facing an assault that is actually national in scope, as social security and other worker benefits come under attack. Some Illinois citizens are not aware that the current pension system is a replacement for social security, not something extra, and that the current assault on the Illinois pensions is part of the broader national attack on working-class livelihoods.

Well-funded right-wing organizations are pushing strong for changes to state pensions that could ultimately spell their doom. As the IEA points out, these are the same moneyed forces that want to eliminate public education. While right-wing billionaires have the money, teachers and their allies have people power. In the upcoming days, when at any time a bill could likely come for a vote, please contact your state representatives and tell them to defend the current pension systems. Visit the We Are One website for more information.



  1. Pingback: The Corporate Assault Against Illinois Teachers « Just BloNo - May 22, 2011

  2. Pingback: Teachers Successfully Stall Attack on Pensions « Just BloNo - May 31, 2011

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