Effect of pension law changes on OPRF is unclear

State raises cap on late-career pension bumps from 3% to 6%

July 16th, 2019 1:41 PM

By Michael Romain

Staff Reporter

State lawmakers have approved changes to the state's teacher pension system, but so far, it isn't clear how they'll affect teachers at Oak Park and River Forest High School. Oak Park Elementary School District 97 officials, however, say the changes won't have an impact on their teachers. 

Last month, Gov. J.B. Pritzker signed into law the fiscal year 2019 budget, which included a provision that increased from 3 to 6 percent the maximum level of annual pay raises that school districts are allowed to give teachers in the last four years of their careers without those districts having to make excess salary payments. The end-of-career payments are designed to boost teachers' pensions — a practice its critics call "pension spiking."

When reached for comment on the recent changes, District 200's superintendent and board president referenced the 2018-22 teacher contract, which gives the board significant leeway in making sure that end-of-career pay bumps don't exceed 3 percent. But the contract also introduces an opportunity for teachers to make up to 6 percent, given the recent change in law. 

The teacher contract was ratified in February, when the 3 percent threshold was still in place. In order to prevent teachers from exceeding the 3 percent threshold and triggering excess salary payments, the board has the right to make adjustments to veteran teachers' salaries. Teachers are also given retirement incentives, such as one-time payouts, designed to avoid pension spiking.

But the contract also includes something called a retirement contingency, which basically puts OPRF teachers in position to benefit from the provision that Pritzker signed in June.

According to the contract, if "the pension code is amended" to allow for end-of-career pay bumps of at least 5 percent "from year to year without requiring an additional employer contribution, before the end of this contract, the faculty member who retires under this provision shall receive four years of increases on salary at the higher rate (5%) not to exceed 6%."

District 200 board President Jackie Moore and Supt. Joylynn Pruitt-Adams declined to comment on recent changes in the pension system beyond referencing the contract language. 

When reached by phone earlier this month, Laurie Campbell, D97's outgoing assistant superintendent for human resources, said teachers in the elementary school district would not be affected by the new law, since the district phased out pension-related pay bumps several years ago. 

Last year, under former governor Bruce Rauner, state legislators enacted the 3 percent cap to limit the practice of teachers getting salary increases in the last four years of their careers in order to increase their pensions once they retire.

The law under Rauner was intended to take some pressure off the TRS, which is only 40 percent funded and in debt to the tune of $75 billion, according to the system's own figures.

But critics of the 3 percent threshold, such as Kathi Griffin, president of the Illinois Education Association — one of the largest education unions in the state — argued that the lower threshold shifted the cost burden for financing teacher pensions from the state to local taxpayers.

"The new language," Griffin wrote in an op-ed that was published in various newspapers across the state, meant that pension costs for raises above 3 percent for TRS employees in the last 10 years of their careers "would be paid by the employer and not by the state of Illinois. Keep in mind, teachers do not get Social Security, which is why TRS and SURS are so important to the profession."


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