What is the purpose for publishing a list of Teacher Retirement System’s recipients who receive over $100,000 a year (a small fraction of the total retirees) when, in fact, the average TRS recipient receives a pension of approximately $43,000 a year? Is it an attempt to deceive the public through a faulty cause-and-effect understanding of the State’s budget deficit? “Despite oft-repeated claims to the contrary, the primary cause of the state’s pension funding woes have very little, if anything, to do with the [minority of] overgenerous benefits, high employee head counts or inflated costs,” (The Center for Tax and Budget Accountability).
Should we remain indifferent to the continuous allegations, fallacious arguments, and attempts to change the public employees’ constitutionally guaranteed benefits and rights by law firms, organizations, individuals and legislators such as Sidley Austin LLP; The Civic Committee of the Commercial Club of Chicago, the Civic Federation, National Taxpayers United of Illinois, Pension Fairness for Illinois Communities, Pension Tsunami, the Illinois Policy Institute, the Chicago Tribune; and people such as Joshua Rauh, Robert Novy-Marx, R. Eden Martin, Jim Tobin, Senator Chris Lauzen, Representative Michael Madigan, Representative Tom Cross and others?
Is it wrong to enrage part of the public and to deceptively place the culpability elsewhere? Does it seem fair and reasonable to exacerbate some peoples’ blind and misdirected anger by fallaciously claiming that the pension systems are the cause for the State’s chronic budget deficit? Is it because some people do not want teachers and other public employees to have a pension?
Consider this: the teachers’ pension was originally established to keep college-educated people working in a difficult and stressful job without the higher salary, benefits, and bonuses commonly rewarded to comparably-educated workers in the private sector. Jim Mosman of the National Council on Teacher Retirement states: “Teacher defined-benefit pensions are smart, effective tools to help keep teacher recruitment and retention costs as low as possible, providing modest, dependable retirement security at about half the cost to taxpayers of other pension models” (National Institute on Retirement Security).
According to the National Institute on Retirement Security, “The over $175 billion in annual benefit distributions from pension trusts are a critical source of economic stimulus to communities throughout the nation and act as an economic stabilizer in difficult financial times. Recent studies have documented public retirement system pension distributions annually generate over $29 billion in federal tax revenue, more than $21 billion in annual state and local government tax revenue, and a total economic impact of more than $358 billion” (Pensionomics: Measuring the Economic Impact of State and Local Pension Plans).
What is the blame for the State’s budget disaster? The State’s antiquated revenue system. “The State’s failure to make its required employer contributions to the five pension systems can be traced to one, simple cause: a state fiscal system that is so poorly designed for decades failed to generate enough revenue growth to both maintain service levels from one year to the next and cover the state’s actuarially-required employer contribution to its five pension systems” (Charles N. Wheeler III, Director of the Public Affairs Reporting program at the University of Illinois Springfield).