Stop the pension penalty insanity

The Daily Herald Editorial Board
Posted4/16/2012 9:05 AM

Since 2005, suburban school board members have known that if they gave employees raises of more than six percent a year, it would cost their taxpayers in penalties.

A law creating the penalties was approved then for the very purpose of stemming big raises that then trigger big pension burdens.


Back in 2010, the Daily Herald first produced a "Public Pension Time Bomb" series of investigative reports. Among other things, the series revealed that in the first three years since the law was enacted, suburban school districts' taxpayers paid millions in penalties to the Teachers' Retirement System.

Despite that law, despite that investigative report, despite the effects of a crippling Great Recession, suburban school districts continue to rack up even higher penalties. Daily Herald State Government Writer Mike Riopell reported last week that suburban districts have given out raises during the past two years that cost suburban taxpayers $3.8 million in pension penalties. Statewide, school districts outside of Chicago racked up more than $11.7 million in penalties.

This is both mystifying and maddening. It's time taxpayers took notice and started demanding better management from their elected school board members who approve the contracts.

The majority of our dedicated school employees are not at fault. Riopell's report noted that 54 percent of the TRS retirees collect pensions worth less than $50,000 a year. Only 4 percent, often former administrators, collect pensions that are more than $100,000 a year.

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Schaumburg Township Elementary District 54 gave former administrator Mohsin Dada three 22-percent raises in three years. He made $341,747 in 2010. His yearly pension is $236,904, but he's also making a $160,000 salary for another suburban district now. Are we the only ones outraged by that?

Riopell's reporting showed 45 suburban districts that owed five- and six-figure penalties in the past two years. These districts aren't helping their cause as some state legislators talk about shifting pension costs back to local schools as the state faces an $83 billion pension funding gap.

Some school districts said they gave 20 percent raises that boost pensions to prompt veteran teachers to retire, saving money long term. Others say the bigger raises had to be given because an employee earned an advanced degree or gets extra money for coaching.

We know teaching is different, but there just aren't many jobs where you're absolutely guaranteed a bigger salary if you get an advanced degree. The school board members approving these contracts have to upend the traditions, upend the systems and do away with the way it's always been done.

Suburban school districts tallied $3.8 million in penalties the past two years. That's $3.8 million that still could be in our pockets. That's $3.8 million that could have been spent educating our children. It's time to stop this madness.

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