Editor’s note: The following guest column has been on hold since June as a result of space constraints in the print edition. It is included here in the online version so the author’s voice can still be heard.
By Bruce W. Jacobsen
It struck me as strange that three out of the four entities that have a withdrawal authority from the teachers’ retirement fund aren’t noted as reliable contributors.
While the rest of the country got a 32+ percent cut in their Social Security tax from 6.2 percent to 4.2 percent, teachers continued to pay 9.4 percent deducted from their check during the 2011 and 2012 period, as they had always paid. The new plan includes cuts in benefits and increasing the teachers’ contribution to 11.4 percent.
The teachers reliably and faithfully submitted their contribution to the Teacher Retirement Fund, which replaces Social Security, because then the state or districts can’t be compelled to make full and timely payments to that Social Security fund, and the price for that advantage is that teachers aren’t eligible for Social Security and even receive a significantly reduced survivor benefit based on their spouse’s Social Security. It is a stacked way to punish teachers, who must have made the politicians sit down, shut up and get their work done. This is apparently the last time the little budding politicians were made accountable.
The effective date below, Jan. 1, 1963, shows the last time the fund was reworked to straighten out the results of the politicians’ thefts. When it was fixed back in 1963, the actuaries took into account that the clean-living, upright citizens that teachers are, would live longer than the “average” retiree. It was not an unexpected occurrence, which politicians have tried to blame for the fund’s difficulties. Why aren’t the ones responsible for the fund’s problems being charged and dunned for the results of their handiwork or lack of fiduciary responsibility?
Thefts of funds (the politicians call it reallocated or deferred payment of funds) that were not so faithfully submitted by the State of Illinois or its responsible entities are the problem. And so, those funds were not there accruing interest on investment, which compounds the problem. Someone else was benefiting. So, the fund has a deficit, which the politicians created by spending it elsewhere, or it was the result of giving tax breaks elsewhere, and now they don’t want to pay it back. Certainly, the recipients of the tax breaks don’t want to pay it back. They are “all” crying very loudly and pointing at the teachers as the problem.
The following is from the Illinois Comptroller website, “The Ledger” (http://ledger.illinoiscomptroller.com/):
Official Fund Name: TEACHERS RETIREMENT SYSTEM
COMPTROLLER ASSIGNED FUND NUMBER: 0473
EFFECTIVE DATE: 1/1/63
STATUTORY ORIGIN: 40 ILCS 5/16-101
ADMINISTERING AGENCY: TEACHERS’ RETIREMENT SYSTEM
FUND CATEGORY: STATE TRUST FUNDS
PURPOSE OF FUND: TO PAY PENSIONS OF RETIRED TEACHERS IN ILLINOIS.
AGENCY NAMES WITH SPENDING AUTHORITY FROM FUND:
• HEALTHCARE & FAMILY SERVICES
• STATUTORY TRANSFERS
• TEACHERS’ RETIREMENT SYSTEM
Bruce W. Jacobsen is a resident of Machesney Park, Ill.
From the Oct. 16-22, 2013, issue