Pension spiking is behind the mess

Mr. Niemaszyk contends the state and taxpayers are shortfunding the TRS pension fund (March 17 Fence Post, “State must keep promise to teachers”), and this is the reason for the pension crisis we are in. However, pension spiking of the past 12 years has made this task extremely difficult if not impossible. And I will illustrate this by using Mr. Niemaszyk’s past salary increase history.

In the second year prior to Mr. Niemaszyk’s retirement he received a 26 percent salary increase. Then in the last year prior to retirement he received a 14.3 percent increase. These salary spikes enabled Mr. Niemaszyk to get at least an additional $1,000 per month in his pension. This reckless practice substantially reduces the life of the pension annuity. The amount that Mr. Niemaszyk and his employer (who, by the way, is the taxpayer) contributed no longer covers its intended life span. So now it is up to the state and its taxpayers to cover this bloated pension.

Unfortunately, Mr. Niemaszyk’s situation is not the exception but more the rule. The rapidly upward spiral of the TRS pension payouts of the past 12 years illustrates this. Pension spiking started 12 years ago and has been prevalent primarily in the school districts in the northern part of Illinois.

I am not against pension annuities for our educators. We need to attract good people into teaching, and a pension annuity is a great way to do this. But I am certainly against the practice of pension spiking or, as the education community calls them, “end-of-career rewards.” How about a gold watch and a farewell dinner instead?

Ken Hofrichter

Elk Grove Village