Ending the insensible: Illinois should outlaw school-district pension pickups
Ending teacher pension pickups is a simple, responsible way for school districts to manage their finances.
In light of Illinois’ harsh budget realities, local school districts are worried they’ll be affected by the budget crisis and are looking for ways to stabilize their budgets.
One way local school districts can cope with the crisis is by having teachers make their mandatory retirement contributions.
Over the last few decades, an increasing number of school districts have begun paying retirement contributions on behalf of teachers rather than teachers paying for those contributions themselves.
Under state law, teachers are obligated to pay 9.4 percent of their salary into the Teachers’ Retirement System in order to obtain a pension. But over the years, school districts began paying that required contribution on behalf of teachers as a benefit. This practice is referred to as a “pickup.” Pension pickups have become a standard in 64 percent of Illinois’ school districts.
Ending teacher pension pickups is a simple, responsible way for school districts to manage their finances. But districts will find it hard to end the practice when faced with pressure from their local teachers unions.
To help local school districts make this sensible change, pension pickups should be barred at the state level.
To end pickups, the General Assembly can pass a bill that removes pension pickups from collective-bargaining negotiations going forward.
It’s not out of line or unfair to ask teachers to pay their share of the costs associated with their own retirement benefits. That’s a simple standard across most industries, public and private.
With local governments facing the harsh reality of the state budget crisis, it’s time to end pension pickups – a practice that never made sense in the first place.