Benefits of pensions reach beyond retirees

In his recent Fence Post letter, Ron Fuchs of St. Charles suggested the creation of a “Pension Benefit Preservation Fund” to help improve the financial stability of Illinois' public pension systems and prevent the state from borrowing money for this year's required government contribution to the funds. Borrowing, he states, “passes the cost to all Illinois taxpayers and most do not benefit from any type of pension plan.”

This is incorrect. Illinois taxpayers do benefit from state pension plans they help fund. The $2 billion in pensions paid to retired Illinois teachers in 2009 created a $4 billion economic stimulus across the state. In Kane County alone, pensions paid in 2009 by Teachers' Retirement System the state's largest public pension fund equaled a $137.8 million annual payroll, money that enabled more than 3,200 people to patronize local businesses and help keep the economy moving.

Mr. Fuchs' proposal simply increases the high contribution rate teachers make toward their retirement. Teachers already pay for a greater portion of their pensions during their careers in education than nonteachers pay. More than 169,000 active teachers contribute 9.4 percent of their salaries to TRS annually. By comparison, the Social Security deduction is 6.2 percent.

On top of the 9.4 percent contribution to TRS, teachers also pay all of the general state and local taxes that nonteachers pay to help fund TRS. Twenty-three percent of each pension check is generated solely by contributions from 169,000 people, while 28 percent of the same check is generated by the 9.6 million Illinois citizens over 18 who pay taxes a total that includes those 169,000 active teachers.

Dave Urbanek

Public Information Officer

Teachers' Retirement System of the State of Illinois

Springfield