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Cullen Blog: Geneva's Teachers in Line for $2 Million-Plus in Pension Benefits After Retirement

Issues involved in the Geneva School District’s contract negotiations with the teachers’ union, with the district's new budget to be voted on at the board's Sept. 24 meeting.

What pension benefits do retired Geneva teachers get?

1. During the six years 2007-2012, 60 Geneva union teachers retired, at an average age of 59, and started receiving pension payments. Of the 60 retirees, 33 had worked less than 20 partial years, and their pensions were limited accordingly. Of the 60 retirees, 11 had worked in the district for 25 or more partial years. Of those 11, the average number of partial years worked was 33, which equates to 24¾ full years.  (Information from the Teachers Retirement System of Illinois, trs.Illinois.gov.)

2. The average retirement age of those 11 retirees was 59. Their average initial annual pension amount was $83,866. In most cases, this was about 70 percent to 75 percent of their final partial year’s salary.

3. Because the Illinois Pension Code, 40 ILCS 5/Article 16, Teachers, (Section 16-133.1) provides for an automatic increase in the pension payment of 3 percent per year, during the expected average 21 years of receiving pension payments (based on the life expectancy of 80 years, per the U.S. Census Bureau), the average such retiree is projected to receive between $2 million and $3 million in pension payments. This aggregate amount will be close to equaling the aggregate amount of salaries they received during their average 33 partial years of working. This pension income is not subject to Illinois income tax payment.

4. Also because of the 3 percent guaranteed annual increase in pension payments, by year 11 of retirement the annual pension actually exceeds the retiree’s last partial year’s salary. The retiree then spends half of her/his retirement years receiving an annual pension amount greater than her/his final working partial-year’s salary. During these years, the taxpayers bearing the burden of this debt will include the teacher’s former students. Many of those students will not be able to afford to retire at age 59, or even 69, or maybe ever, and none will receive their full meager Social Security benefits, if any are left then in that Ponzi scheme, until they turn 67 years old.

5. By year 21 of retirement (at 80 years of age), the retiree’s annual pension payment will have almost doubled. The $ 83,866 per year will have grown to something like $160,000 per year. 

 

Do the citizens realize how much the teachers get paid in total compensation?

1. A recent survey on rasmussenreports.com found that only 25 percent of Americans know how much teachers really make. The report said:  

 “ … only 25 percent correctly recognize that the average school teacher is paid between $40,000 and $50,000 a year. …”

2. Some Geneva residents may not realize how much the District 304 union teachers are paid in total compensation, including free health insurance and pensions.  Their salaries (average $72,305 per partial year) are public records, shown on familytaxpayers.org and elsewhere, so there is natural tendency to focus just on the salaries.  But doing the math as described above reveals that THE SALARIES CONSTITUTE ONLY ABOUT 50 to 60 PERCENT OF THE TOTAL VALUE IN COMPENSATION the union teachers get for each partial year of work.   

3. A union teacher receiving a salary of $100,000 per partial year is actually receiving total compensation worth closer to $200,000 per partial year.  A salary of $50,000 computes to total compensation worth closer to $ 100,000. The biggest amount of this total above the salary is in the pension, which is not paid currently as dollars but is “paid” currently as the accrued right to receive the pension dollars later. The pension dollars are received after the teacher retires, typically in Geneva at age 59. The Union Greenshirts can easily afford to retire at age 59 if they want to, because their pensions are so large (assuming they have worked for 25 years or more). Or they can choose to work more years and pile up further riches.    

 

50% Overcompensation

1. The Heritage Foundation (heritage.org) published a report dated Jan. 1, 2011, with the headline, “Public Schools Pay Teachers 50% Above Market.” The report concludes that the typical public school teacher makes about $1.52 for every dollar made by a private-sector employee with similar skills. “In addition to gold-plated retirement plans, the study notes that most teachers accrue generous retiree health benefits, worth an extra 10 percent of wages. The researchers also factored teachers' relatively high job security into the equation.”

2. People who work in the private sector have first-hand experience to compare the union teachers’ total compensation packages with those they have or know about.

 

How did the teachers unions get such a sweet deal from the Illinois government? 

1. This is the dirty little secret that the teachers’ unions and the corrupt government bosses whose votes they have purchased for most of the last 40 years don’t want the citizens to know. The Illinois teachers’ unions have gotten their money’s worth for the hundreds of millions of dollars they have spent lobbying and supporting Illinois government candidates who agreed to enrich them at the expense of the citizens. If all the unions were getting were those $72,000 per partial year’s salaries, they wouldn’t have spent those hundreds of millions of dollars. The biggest prize their lobbying purchased was the Cadillac pensions, as is explained in great detail in the book Illinois Pension Scam and on the website championnews.net.  

2. This scam is built into Illinois law (40 ILCS 5/16-133), not written in the school district’s contract with the union. The pension amount can be as high as about 75 percent of the average of the four highest partial years of salaries, after a 6 percent bump-up. Each salary raise increases the pension amount in lock-step.   It’s like getting run over by the tractor of an 18-wheeler: After you get hit by the tractor, you know for certain that the other 14 wheels and the trailer are coming.  The School District can only limit the pension obligations on the citizens by limiting the union teachers’ salaries.

3. Tens of thousands of unemployed certified teachers in Illinois are hoping to get in on this deal, including the 1,000 teachers’ names on the Geneva School District’s waiting list. 

 

Who pays these pensions?

Illinois’ taxpayers pay the lion’s share of these pensions, every year through the Illinois income tax.  (The local property taxes pay the school district’s current year’s expenses, including salaries.)   The Illinois income tax rates will have to be increased substantially in the years ahead to pay for the pension burden.   The 67% increase in rates that was enacted effective 1-1-11 has made hardly a dent in Illinois’ accumulated and 50% under-funded government union pension burden.   The union teachers also contribute some to their own pensions.   This is part of the income tax burden lurking ahead for Illinois’ children when they grow up and try to make a living for themselves.   They will be the ones hurt the most by this scam.  One college professor has called this “child fiscal abuse.”  

 

The Civil Rights Issue of Our Time

1. This is the true civil rights issue of our time: the right of Illinois’ children to a chance to achieve at least a middle class standard of living as adults, without being buried under a crushing burden to pay Illinois government union pensions.  I don’t know if this civil rights issue is being taught in sociology or other classes in Geneva High School and the middle schools, but I would recommend that the School Board direct that it should be taught. I can’t think of a subject that is more urgent for today’s students to learn about. I assume many parents would want their children to learn about this civil rights subject.

2. If the students had the maturity and understanding of how the union greenshirts’ pensions will darken their future as adults, they might get together and decide that one day a week they would all wear black shirts to school.  Imagine a scene in one of the corridors of a Geneva middle school, with hundreds of students moving about to classrooms or to lunch. See what is printed in white on the back of each of their black shirts: VICTIM OF THE UNION GREENSHIRTS’ PENSIONS.     

 

Contact the Geneva Board of Education

The Geneva Board of Education is currently engaged in negotiations with the teachers union, the Geneva Education Association, about a new contract for the coming years. The board needs to receive input from the public as soon as possible on this matter in order to know what the community thinks about it. The board can be contacted through the board secretary at 630-463-3010 or by emailing Board@Geneva304.org.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

G.Ryan September 20, 2012 at 07:36 PM
Jim, this is an excellent synopsis of what us taxpayers are faced with in today's economic climate. Your points of reference are factual and true. This is the most pressing scam of our decade. And it will eventually bankrupt us all. The entitlement mentality is enslaving us and future generations to poverty and misery. This is a prime example of HYPERINFLATION. Government bureaucracies encourgaging the growth of Labor unions, economic mismanagement, higher taxes, spending beyond its means philosphies and not being held in contempt for economic realities. History should teach us all that UNFUNDED entitlement programs are nothing but COMPLETE DISASTERS as PUBLIC PENSIONS will ultimately IMPLODE thus, crushing the private sector and its middle class. Fiscal irresponsibility is the government's motto. The government has bankrupted everything it enables. Look at Social Security, Medicare and the US Postal Service. This scam will also falter in time. Thanks for your regarded research and aptitude relative to this most controversial issue put the "Cullen Classic Way". Loved it.
Mike September 21, 2012 at 12:41 PM
Terrific article, James. Whenever I hear a public union employee defend their pension by saying, "I paid into it so I deserve it" I don't think they have any concept how much a private sector worker would have to sock away in his IRA to earn that kind of money. You want 100K per year after you retire? You better have about 2.2 million in your IRA. I guarantee the union workers haven't contributed anything close to that. (If they had, the pitifully low pension fund wouldn't be coming home to roost on the backs of the next generation of Illinois private sector workers.) And of course, the State of Illinois doesn't tax income from pensions - ensuring that all the retired union workers will stay here (with winter homes elsewhere, no doubt) and continue to vote for the politicians who have been so generous to them.
Chris September 21, 2012 at 01:44 PM
That is what attracts people to the teaching profession...All of us have a choice of professions. Many of you sound like jealous teacher haters....
Mike September 21, 2012 at 01:52 PM
Not at all, Chris. It's human nature to try to get as much as you can - why should teachers be any different? It's more of a concern about how these pensions are going to be met.
Fun with Numbers September 21, 2012 at 04:43 PM
National Education Association (A 501C-5 tax-exempt organization) For Fiscal Year End 8/31/10 Total Revenue $377 Million Dues from members — $358 Million (95% of total revenue) Revenue redistributed to “causes” $117 Million (31% of total revenue) http://tinyurl.com/8gepux8 Illinois Education Association (A 501C-5 tax-exempt organization) For Fiscal Year End 6/30/11 Total Revenue $50 Million Dues from members — $44 Million (88% of total revenue) Total Employees — 352 http://tinyurl.com/8dr4g6r Geneva Education Association (A 501C-5 tax-exempt organization) For Fiscal Year End 7/31/11 Total Revenue $41,000 Dues from members — $41,000 (100% of total revenue) Compensation to 35 paid positions —$31,000 (76% of total revenue) http://tinyurl.com/94bthxv What do all three organizations have in common? A lot of your tax dollars (dues) being put to work against you to maintain the system.
Lou B. September 22, 2012 at 03:56 AM
Well done Mr. Cullen. Where are all of the teachers on this? I would hope they would step up and defend their outrageous pension numbers, or at least send some spare change to those of use who have to live on Social Security (and who worked an 11 month year, just to get that).
Fun with Numbers September 22, 2012 at 02:22 PM
Please fasten your seatbelts. Our Governor is anticipating turbulence ahead. Labor strife and taxpayer revolt should make for an active Patch in 2013. http://www.chicagotribune.com/news/local/ct-met-illinois-pensions-0923-20120922,0,7446908.story The Teachers Retirement System lowered its expected investment returns from 8.5% to 8%. Independent advisors would argue that even 8% is too high in the current and projected market. By not lowering it to 7.5% or 7% we simply mask the problem. The plan is to shift the obligation to the school district and only then do we learn the depth of the problem from underfunding and overstating returns. Will the last taxpayer leaving Illinois please turn off the lights. Thank you for flying doomed democratic airlines!
John R September 22, 2012 at 02:51 PM
Again you lost me when you started referencing the heritage foundation. I half expected you to start quoting fox news. I think when we rely on these partisan think tanks, be it heritage foundation or the center for american progress, then we end up with distorted information. I'd suggest that we find some non partisan research and everyone needs to turn off msnbc and fox news. Delete the think tanks from your browser favorite's. The pension question needs to be resolved in the State Legislature. Are you organizing a march on Springfield? Do you suggest we start writing Randy Fortner our State Rep? If so count me in. I agree that these pensions need to be brought into line and the Springfield mess needs to be cleaned up. What's with the whining about total compensation? I guess when we talk compensation we have to factor in all cost. I've never personally done that when revealing my own salary. I'm not even sure where to start. So I don't get what you think an educator should be making. What's the value that you all see in a teacher. Is it full benefits with a starting salary of $20,000? Or is it no benefits with a base of $39,500? If it's the $20,000 range then if your kid is a teacher you better have a room ready for him in the basement because he/she won't be living independently. I've read your blogs and seen your presentation. I'm sorry to say this but I don't feel sorry for you. I think your doing just fine. John Rice
Fun with Numbers September 23, 2012 at 02:27 AM
Illinois' data and arithmetic are politically agnostic. http://trs.illinois.gov/subsections/pubs/publications.htm The debt and deficit are equal opportunity violators.
Max September 23, 2012 at 03:25 AM
Let's forget Fox News and MSNBC and other partisan sources. Let's just look at the official numbers from the State of Illinois, NEA, IEA, GEA and D-304. They alone will serve to describe the hell-hole of debt into which we are descending. No slant, no spin, no shades of meaning. It's not about loving/hating teachers. We all loved our best teachers, and want our kids to have a good education. We understand that requires reasonable compensation for teachers. We also understand that the supply of competent teachers and the money available to pay them is what makes a market. You don't give the automobile salesman a couple thousand extra just because he works hard and is good natured. And the same applies to teachers. Max

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