An Illinois Senate Republican, who is also a teacher, has suggested a bill that requires school districts pay starting teachers $40,000 a year should be amended to get future teachers out of an underfunded state pension system. The House narrowly passed House Bill 5175 last month, 61-38.
Proponents of the measure said teachers deserve the starting salary of $40,000. Opponents said the mandate will hurt cash-strapped districts, especially in rural areas.
With the measure now in the Senate, state Sen. Tom Rooney, a teacher, said the math doesn’t work. “Just starting somebody at [$35,000] and then changing them to [$40,000] could mean a half a million dollars just in that one person’s pension,” Rooney, R-Palatine, said. “We can’t be working in that direction.”
The American Academy of Actuaries says pension funds should be fully funded. The Illinois’ Teachers’ Retirement System is not even 40 percent funded.
Rooney believes the only way Republicans will get on board is if the measure is amended to require new hires go into a 401(k) type plan, not the poorly funded Teachers’ Retirement System.
“Anybody moving forward who gets hired under this new salary, they would have to be something like [State University Retirement System]-style hybrid, something like 401(k),” Rooney said. “You cannot be in this pension system if you’re going to start out $5,000 more than what was negotiated in your district.”
SURS eligible employees can choose a self-managed, defined contribution plan instead of the defined benefit plan through pensions.
Rooney said lawmakers need to stop making big promises without corrective action to make good on such promises.
“Everybody down here seems to just want to make all kinds of promises to everybody and, gee. we never get around to paying for those promises,” Rooney said. “That’s how we’re in this problem in the first place.”
The office of the Senate’s chief sponsor, state Sen. Bill Cunningham, D-Chicago, said they’re working on an amendment, but declined to elaborate until after it is filed.
The Senate is back in Springfield with an Education Committee hearing Tuesday.
[The above story is from Illinois Radio Network News.]
