Report: Teacher pension perk not uncommon across Illinois

By The Associated Press | Posted - Aug. 26, 2015 at 2:02 p.m.



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CHICAGO (AP) — Hundreds of school districts across Illinois cover either all or most of their teachers' retirement contributions.

The issue is in the spotlight as Illinois' largest district, Chicago Public Schools, is in the middle of tense contract negotiations and is seeking help from legislators.

Chicago Mayor Rahm Emanuel wants teachers to pay the full contribution. The cash-strapped district has paid most of the 9 percent contribution. The Chicago Teachers Union argues that amounts to a pay cut.

Thousands of teachers in other school districts, which pay the full amount of educators' contributions to the Teachers' Retirement System, get a better deal than Chicago teachers, the Chicago Tribune (http://trib.in/1MMTdCs ) reported.

Some districts, including in suburban Wheeling, believe picking up pension costs helps keep them competitive and entices teachers who accept a lower salary in exchange for retirement benefits. In some cases, the perk was written into contracts decades ago and hasn't been changed.

"It is a benefit that we offer to our teachers, and just like any benefit, it takes a long time to make any changes," said Lynn Glickman, head of human resources in Wheeling's District 21. "It is a pretty common practice right here in this area," she said, "and we are competing with other districts."

Some unions have also argued it's a cost saver because if the money was paid as a salary it would be subject to payroll tax.

In April, the Illinois State Board of Education published a teacher salary study that showed 499 of the 769 school districts that participated said they were covering all or some pension payments for their teachers. A majority of those districts reported that they covered the full 9.4 percent contribution.

Chicago Public Schools wasn't listed in the study, but about 90 other districts in the region reported that they paid full or partial contributions for teachers, though some district officials later said the figures could be skewed by mistakes in reporting or misinterpretations of the questions in the study.

Matters are complicated because members of the Teachers' Retirement System, including teachers, "shall make contributions" to their pension plans, according state law. But school districts send those contributions to the Teachers' Retirement System using money "from the same source of funds which is used in paying salary to the member."

The teacher contributions are treated as "employer contributions" under the federal tax code and are tax exempt, "regardless of who actually pays the 9.4 percent contribution," according to Teachers' Retirement System documents.

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Information from: Chicago Tribune, http://www.chicagotribune.com

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

The Associated Press

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