School pension payments are not penalties

In a recent news story about Palatine Township Elementary District 15, the Daily Herald incorrectly labeled payments made by school districts to Teachers' Retirement System in the wake of high salary increases as "fines" and "penalties."

At issue are payments owed by school districts that grant a teacher a raise in excess of 6 percent. Under state law intended to assign the pension costs associated with these raises to the district that grants them, the district must pay to TRS the actuarial cost of the teacher's pension created by the portion of the raise that is in excess of 6 percent.

The words "penalty" and "fine" imply wrongdoing. It is not illegal under the law for school districts to grant raises that exceed 6 percent.

The extra payment due is not a "penalty." In the same vein, paying a sales tax for voluntarily buying a loaf of bread is not a "fine."

Dick Ingram, Executive Director

Teachers' Retirement System