Wednesday, October 5, 2011

A Letter to My Colleagues and Friends at IRTA, Du Page

Why should retired and active teachers be concerned about so-called "pension reform?" Consider the effects that it will have on the defined-benefit plan if the benefit formulation for Tier 1 and Tier 2 teachers is reduced? And what might the current teachers in Tier 1 do if their pensionable salary is capped, as it is true for members participating in the Tier 2 plan? What do you think would happen if the vesting period for Tier 1 members is increased, and their cost of living adjustment is changed to a simple interest computation or even possibly eliminated? And what might Tier 1 teachers do if their retirement age is also raised to 67 and their extra-curricular assignments are excluded from the calculation of their final average salary (which has been extended to a ten-year average instead of four)?

What would many Tier 1 members do if their contributions are increased steadily from 9.4 percent to 17.43 percent by 2027? It is important to note that as some members quickly migrate to a Tier 3 defined-contribution option, the remaining teachers will have to make up the difference, as contributions will need to increase even more than a projected rate of 17.43 percent.

These are a few of the ideas discussed and examined in meetings thus far and will be debated in the future until there is agreement on the issues.

Now ask yourself these questions: how will the above-mentioned possibilities invariably threaten the existing defined-benefit plan for current teachers, and why would many teachers choose the Tier 3 defined-contribution option? The answer is that most beginning teachers do not believe that there will be a guaranteed pension for them anyway, for they are cynical because of the past spring legislative session, and some of them will not be able to afford continuous increases in their contributions as well.

There are more questions to ask: will the initial, anticipated 10-15% exodus to the Tier 3 option also increase the State’s cost and its contributions to the pension system? The answer is yes, and will the State pay for it? The answer is doubtful, and though teachers might become eligible for social security (and that will have to be determined at the federal level), who will match their contribution?

In addition to these complex considerations, will the State also have to pay down the $44 billion unfunded liability of TRS more quickly as a result of any movement to Tier 3? The answer is yes. How will all of these concerns ultimately affect you? Now ask yourself what might be the dangerous effects and legal challenges of a possible constitutional amendment to achieve the aforementioned resolutions that might be considered?

Why is it important that we meet with our legislators and tell them that "pension reform" will not reduce the unfunded liability, and it will not address the causes of the State’s budget problems but create both unplanned and disastrous consequences? Why is it important that we meet with our legislators? It’s imperative that we do because attacks on our pensions will not go away; thus, we need to discuss reasonable and fair alternatives for solving the state’s budget problems and the dire effects that a senate bill like 512 or any so-called "pension reform" bill would have on Illinois teachers and their families, and on the recruitment of the best and brightest university candidates for teaching in our schools.

We need to discuss the fact that any proposed "pension reform" bill will violate a contractual obligation guaranteed by both our State and U.S. Constitutions. We need to tell our legislators that we vote, that our families and relatives vote, that our friends and neighbors vote, and that we will network with anyone who will help us protect our retirement security, our subsistence, and our dignity.

glen brown

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