Editorial: After 7 years, some schools still aren’t learning on pension penalties

Any teacher knows students need to be exposed to a concept more than once before they really get it. But it’s hard not to be impatient with how many times some suburban school districts have had to be reminded of a state law meant to curb public pension excesses.

The law caught some school districts by surprise after it went into effect in 2005. Many suburban school boards faced charges from the Teachers’ Retirement System as high as $288,680 for driving up pension costs by granting soon-to-retire educators raises over a 6 percent benchmark set by state lawmakers.

Seven years later, for the 2011-12 school year, 70 suburban school districts still were charged by the state under the law, with the highest — Schaumburg Township Elementary District 54 — paying $489,841, Daily Herald State Government Writer Mike Riopell reported this week.

Why is this still happening?

Taxpayers — already covering educators’ raises and the pensions linked to them — should not be paying penalties incurred by school boards’ overgenerosity year after year -- one of the issues leading to the crisis on which a Daily Herald forum will focus next week.

After seven years, attributing the penalties to employment contracts that predated the law, as District 54 unsuccessfully argued, no longer holds water. It’s also hard to buy another explanation given by school districts: that getting short notice of a retirement can leave them accidentally afoul of the state law because of that employee’s recent raises over 6 percent.

With few exceptions — such as a big promotion that comes with a salary increase — pay hikes over 6 percent a year are out of touch with today’s reality. Failing to anticipate a retirement shouldn’t be an excuse for excess at a time when median raises are at 3 percent, according to a national survey of employers in all sectors by Buck Consultants.

While we’re shaking our heads about this fine mess, let us add that we hope school boards have learned a little caution. Making compensation deals that bind them for six, seven or more years into the future can be dangerous. No one can look that far into the future on the economy, and, while they may appreciate the chance for stable planning, school boards should always think twice before making promises that last that long.

Next spring, we’ll ask the Teachers’ Retirement System to tally up charges paid by school districts in 2012-13 for exceeding the 6 percent salary benchmark. Let’s hope the suburbs are not represented on that list — and certainly not with penalties in the hundreds of thousands, or even tens of thousands, of dollars.