How to get more than your fair share from an Illinois pension

Illinois offers generous pensions to public workers, but some workers engage in legal schemes that give them more than their fair share. Here are some common Illinois pension games that taxpayers are forced to fund.

Illinois taxpayers must eventually fill a $313 billion hole to pay all the promises made to those roughly 1 in 10 Illinois adults covered by a statewide pension plan, but some retirees will take more than others because they figured out how to game the system.

Here’s how to get more than you deserve, and do it legally.

Pension spiking artificially inflates retirement payouts

Pension spiking is when an employee close to retirement is given large raises to boost their “final average salary” used to calculate their benefits. Traditional defined-benefit pension systems, such as government workers have in Illinois, are not based on how much an employee and employer pay into the system during the employee’s career, like with a 401(k). Instead, they’re based on a formula for end-of-career salary and years of service.

For example, the final average salary for teachers and administrators hired before 2011, so called “Tier 1” members, is equal to “the member’s highest average salary earned during four consecutive years out of the last 10 years.”

Spiking inflates already generous pensions, making it even harder for taxpayers to sustain benefits for employees not abusing the system.

Illinois imposed limited restrictions on pension spiking for the Teachers’ Retirement System in 2005, capping increases at 6% annually for teachers near retirement. Districts can offer raises above the cap, but are required to pay for the increased cost of the benefits rather than relying on the state. Bipartisan legislation passed in 2018 lowered the cap from 6% to 3%. It was projected to save taxpayers $21 million across all pension funds. Unfortunately, it was never implemented.

Gov. Pritzker’s 2019 budget raised the cap back to 6%.

School districts can and do still choose to give raises above the cap. During the school years of 2018-2019 and 2019-2020, Illinois schools paid nearly $9 million in costs for pension spiking above the cap. Local taxpayers, primarily through property taxes, still get hit with the bill.

A glaring example of pension spiking comes from Mary Curley, former superintendent of Community Consolidated School District 181 in Hinsdale and Clarendon Hills. In Curley’s final two years with the district, she received two 20% salary increases. Between 2005 and her retirement in 2007, her salary went from $267,624 to $385,378. Curley’s pension currently stands at $27,878 and she has been paid nearly $4 million in total benefits.

Public workers other than school administrators also benefit from pension spiking. Former Metra CEO Donald Orseno received two significant raises in years leading up to his retirement in 2017, including one that was granted retroactively. After a single year on the job in 2015, he received a $26,500 boost to his $262,500 salary. In 2016, he was granted another $28,000, upping his salary to $317,500. Orseno is currently receiving the largest Metra pension, getting $15,752 per month from taxpayers.

Double dipping lets retirees draw huge pensions, take other high-paying jobs

Double dipping is another common pension abuse allowed by the current pension system, where the employee can retire at a young age, immediately draw their full pension and immediately go to work in another high-paying position either in the same organization or elsewhere. Employees benefitting from pension spiking and double dipping aren’t doing anything illegal, but the taxpayers of Illinois deserve to know these things are happening and contributing to the pension crisis. A pension system that allows some employees to double or triple benefit while most others do not is fundamentally unfair and begs further questions about why some employees get such special and lucrative deals while others do not. 

One example of double dipping led to changes to pension rules. Robert Marshall retired after 28 years of service with the Naperville police force and immediately took a job as Naperville’s assistant city manager, then returned to the police department as chief of police. He collected a $151,000 salary while receiving his $101,100 police pension. He began contributing to a second pension through the Illinois Municipal Retirement Fund when he became assistant city manager and continued contributing to that pension as police chief. The state contested his pension payout and salary collection, but ultimately dropped the case because of the language used in the pension laws. Marshall’s situation was one that prompted the closure of the loophole allowing double dipping for law enforcement officers under the Rauner administration.

Double dipping has also been common among school district administrators. John and Ellen Correll are a husband and wife double dipping duo. Both retired and then shared the role of superintendent at Skokie School District 73.5 during the 2020-2021 school year, earning each of them $90,000 on top of the pension payouts they began collecting in 2019. They did the same thing the year prior at Antioch Consolidated School District 34. John Correll’s current pension is over $210,000 and Ellen’s is just under $80,000.

Former Barrington Community Unit School District 220 Superintendent Tom Leonard retired at 57 in 2014 with a nearly $200,000 pension. He promptly moved to Texas to take a similar role that now pays him $300,000 annually, meaning he makes over $500,000 between his salary and pension. If Leonard lives to 82, he will stand to make $6.4 million from his Illinois pension alone after contributing just $322,000 toward it. That massive return on investment comes courtesy of Illinois taxpayers, who subsidize someone no longer even living in the state.

Former Chicago Public Schools Chief Education Officer Barbara Eason-Watkins cashed in when she retired at 57 in 2010. She collected a payout of almost $240,000, more than her final salary of $192,850, with nearly $160,000 of that total attributed to unused sick days. In July 2010 she became the superintendent for Michigan City Area Schools in Indiana where she continued to work and earned a $178,000 salary as of 2020. That is in addition to the $156,000 pension Illinois taxpayers are sending her each year.

How to end these abuses

Pension abuse schemes may be legal, but they are far from right or fair. They have been enabled by a corrupt, broken system that is dragging down the state’s finances. Government insiders have gotten rich while taxpayers have been crushed by higher taxes and reduced services. The state’s credit rating has suffered, making it more expensive for Illinois to do business. The state’s economy has suffered because of outmigration, unaffordable housing and property taxes, and diminished job growth.

Fixing these abuses will take a constitutional amendment to allow for real reform that will put the state on a sustainable path forward. It’s time for lawmakers to let the people vote on pension reform.