Younger teachers in Illinois, whose pensions were slashed last year by the legislature, should start asking whose benefits they're really paying for. The new Tier 2 pension only costs about 5 percent of salary...yet teachers are paying 9.4% of their salaries into the Teacher Retirement System. This takes the usual shell game of wealth transfers from younger and more mobile teachers to retirees to a whole new level: theft.
My hometown newspaper, the Southern Illinoisan, is running a story that explains who benefits the most richly from the old Tier 1 pension: union functionaries who stopped teaching decades before retirement but still receive a state-funded pension:
Then there is Kenneth Drum. TRS pays Drum more than $160,000 a year, despite Drum only working for 12 years as a teacher.
Drum's large pension comes not from his time in the classroom, but rather because of a 20-year career at IFT. Drum has collected more than $2 million from TRS since retiring in 1994, and is one of 21 former NEA, IEA, IFT or IASB employees who has collected more than $1 million from the TRS since retiring.
Comerford said he couldn't speak for individuals as to why they didn't take an IFT pension when they went to work for the union instead of continuing paying into a public system.
Illinois is a perfect example of how tinkering around the edges of insolvent pension funds just winds up hurting new teachers. The system may in fact be worse than Social Security (which Illinois teachers don't receive) for workers in Tier 2, yet those teachers are kicking in part of their salary to make sure retired union presidents keep earning six figures into their golden years. Radical reform of public-sector pensions is needed to ensure teaching is an attractive opportunity to people just entering the field.
? Chris Tessone