Why some retired teachers get two pensions

Each month, more than 700 retired suburban educators receive two pension checks for their years of work in the same school district.

Because of a quirk in the state's pension law, these retirees get one pension check from the Illinois Teachers' Retirement System and another — usually a much smaller one — from the Illinois Municipal Retirement Fund.

The 713 retirees from 66 suburban school districts will receive a combined $28.5 million in TRS benefits in 2015 and nearly $3.3 million from IMRF, according to a Daily Herald analysis of pension system data obtained through an open-records request.

The dual pensions for these 713 retirees average $39,978 at 20 years of TRS service and $4,595 at 4.9 years of IMRF service.

The reason certain individuals qualify to receive two different pensions is that at some point they held one job that required certification and another that didn't. But in another twist, both pensions are based on the highest-paying job, which helps inflate the secondary pension amount, pension administrators explained.

“That's the Reciprocal Act,” said Louis Kosiba, IMRF's executive director. “It was meant to provide portability of benefits between the state's 13 major pension systems. It's beneficial for two reasons: you're vested in all systems once you're vested in one, and you're going to use the higher salary amount for all pensions.”

Normally, public employees have to establish a minimum amount of time on the job to qualify for a pension. That's usually eight years for most of the state's pension systems, but 10 years in TRS.

The Reciprocal Act eliminates the minimum service time for secondary pensions as long as the employee has met the minimum employment period for their primary pension. That means employees with as little as a month's service as a teacher's aide qualify for an IMRF pension as long as they worked more than 10 years as a teacher.

Additionally, that IMRF pension isn't going to be based on the lower-paying teacher's aide post, but the higher-paying teacher's salary.

“I'm shocked, but I'm not shocked,” said Kristina Rasmussen, executive vice president of the Illinois Policy Institute, a conservative organization that tracks and analyzes government spending. “This is just another example of how poorly the state's pension plans were created. And you wonder why taxpayers are so fed up with the status quo.”

Of the 713 retirees, 563 have fewer than eight years of creditable IMRF service time and average an IMRF pension of $3,200 a year, according to the analysis. Those 563 also average a TRS pension amount of $45,131 a year.

The most frequent cause for the dual pensions is time spent early in a career serving as a teacher's aide or assistant.

“People getting a teaching degree are looking for a job and get their foot in the door as a paraeducator,” Kosiba said. “They'll stay in that position until a teaching job opens up, and if the school district likes them, they'll get hired on.”

Roberta Werneske is no exception. She is one of 72 former Elgin Area School District U-46 educators receiving pensions from both TRS and IMRF.

She spent most of her 28-year career teaching first and second grades, but she started as a teacher's aide. She doesn't believe she's taking advantage of taxpayers by collecting two pensions and noted most retired teachers don't receive Social Security benefits like other retired public employees who receive both a pension and Social Security.

“Every little bit counts,” Werneske said. “I think that people that are giving teachers the negative attention are the people who get these huge golden parachutes and make more in retirement than they did when they were working. We paid into our pension fund, and now we're retired and we're collecting what we're owed.”

Werneske and 109 others among the 713 dual-pension retirees are also benefiting from a 2006 change in the state's pension law that allowed former teacher's aides, and only teacher's aides, to collect IMRF pensions with less than a year's worth of service.

Kosiba said without that change in the law, those with less than a year's worth of service would simply receive their employee contributions back with interest upon reaching retirement age.

The IMRF pension does put limits on her benefits. Because she spent less than a year as a teacher's aide, her IMRF benefit is based on 1.67 percent of her final average teacher's salary. If she were allowed to add that time to her TRS service and forgo the IMRF benefits, her teacher's pension would have started 2.2 percent higher.

While these types of dual pensions weren't addressed with pension reform laws that were eventually struck down by the courts earlier this year, Rasmussen said they should be in the future.

“You want to be sympathetic, but everyone else in the private sector is earning retirement benefits from what they made at the time, not on what they're making 30 years from now,” she said. “The legislature could change things going forward without a doubt.”

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Contact Jake at jgriffin@dailyherald.com or (847) 427-4602.

By the numbers

713: Number of retired suburban teachers receiving two pensions for work in the same district.

66: Suburban school districts with at least one retired teacher receiving two pensions.

$44,573: Average combined pension amount in 2015 of the 713 who receive pensions from Illinois Teachers' Retirement System and Illinois Municipal Retirement Fund.

$39,978: Average TRS pension amount.

20: Average years of TRS service.

$4,595: Average IMRF pension amount.

4.9: Average years of IMRF service.

Source: Analysis of pension system data