Geneva's Union Teachers Show It's Easy to Retire Early on a Pension of $75K Per Year

The little lambs will have to labor long and sacrifice much,
so The Privileged Class can luxuriate in plush early retirement.                         

If you were a Geneva union teacher and retired last year, there’s a 60% chance your annual pension annuity is more than $ 75,000, according to public records on www.openthebooks.com. That amount automatically increases 3% per year compounded, so it more than doubles during the 20+ years (per U.S. government life expectancy tables) that most public school teachers live after retirement at approximately age 58. That adds up to something like $ 2-3 million collected in retirement.  Today’s students will be paying a large share of that $ 2-3 million after they graduate to adulthood.

Who Wants To Be a Millionaire?

Geneva’s union teachers can retire at age 55 at 75% of the average of their final four years of bumped-up salary, if they have taught for 33 years, under  Illinois’ Teachers Retirement System law, http://www.ilga.gov/commission/jcar/admincode/080/08001650sections.html.

Actually, that is 33 partial years, which at 9 months per annual period is the equivalent of 24 3/4 full years of work. The district website,   https://www.geneva304.org, reports the average salary of Geneva’s union teachers is $ 72,305 per 9-month work “year.”  That’s the equivalent of $96,406 for a 12-month year. (All the salaries are listed on www.familytaxpayers.org.)   

The key to understanding the total compensation package is to realize that many of the compensation details, particularly on pensions, are provided by the TRS law and the Illinois School Code, 105 ILCS 5, and are not spelled out in the local school district contract with the union. An example is the provision for tenure after two years, under Article 24: Employment of Teachers—Tenure—Duties of Teachers, at 105 ILCS 5/24. The astonishing length of this statute reflects the fact that it’s easy to get extraordinary benefits baked into the laws when the Governor and the leaders of the State Legislature represent the public sector unions and not the citizens. 

It’s About the Retirement Age and the Pension Amount

This is in addition to the health insurance benefits the District pays for, plus 60% payment for family members’ health insurance, worth about $7,000 per year on average.  That amounts to a six-figure compensation package pro-rated to a full year. The District website contains the last teachers union contract (under “District Information”), which includes many jaw-dropping goodies for the union members, some on pages 25-30. But the big kicker is the union teachers’ pension surprise awaiting Illinois' income taxpayers.   

A Long, Long Waiting List to Get In

So it’s no surprise that there’s a long waiting list of qualified teachers eager to get in on this deal.  The Geneva school district has a list of 1,000 teachers who have indicated interest in getting one of the 400 teaching jobs in the District. The Chicago Tribune featured an article in its Dec. 11, 2011 edition entitled, “Unemployed Teachers Finding Work as Nannies,” which reported that more than 8,800 Illinois teachers received pink slips in 2010, and many are finding welcome work as nannies and baby sitters.

Another study compared the number of new teaching degree graduates in recent years to the number of public school teaching jobs open, and estimated there may be about 75,000 qualified teachers in Illinois who have been unable to get teaching jobs.  http://www.championnews.net/2012/01/20.

The Privileged Class
Why is there such an oversupply of teachers? The Heritage Foundation explained one big reason in its recently published study.

“Critical Issues in Assessing Teacher Compensation.” They concluded that, on average, public school teachers receive total compensation that is roughly 50 percent higher than what they would receive in private-sector employment. Also, teachers have the advantage of not having to pay into the Ponzi scheme known as Social Security. In most cases this is a plus for them, because Social Security pays middle-income workers a below-market rate of return, generating only about two-thirds of the benefits that workers could receive by investing in safe government bonds.

The American Enterprise Institute published an article in its 11-4-11 issue of the American that pointed out that many typical teacher pensions are higher than most people’s working salaries. They wrote: “The 2010 Comprehensive Annual Financial Report in Illinois shows that the average benefit paid to a 60-year-old retired teacher with 35 to 39 years of service—a full working career—was $67,452.  This is enough to provide a retirement income 50 percent higher than most Americans earn while they’re working.” 

A recent book published by the Brookings Institute, Special Interest:  Teachers Unions and America’s Public Schools,  points out that teachers receive valuable intangible benefits in ways that are often overlooked by the general public and are difficult to quantify in dollars, but many people would be happy to work for far less salary if they had them. These include: summers off (flexibility to work another job or enjoy the leisurely life); work years’ credit up to 2 years for accrued and unused sick leave;  and tenure after two years—virtually absolute lifetime job security, when hardly any other career has that. It’s worth a lot never to have to worry about hearing Donald Trump’s famous two words.

It’s All About the Children 

The Kane County Chronicle’s issue of Aug. 24 featured a cover story on a retired teacher from another District who is 80 years old and has been enjoying his retirement for the last 24 years following his retirement at age 56. Who has been paying his generous annual pension for this quarter century?  For most of the years, that has included his former students, who will not be eligible to receive Social Security until they are 67 years old (if there are any benefits then). The teacher paid for some of the pension, and the taxpayers—property taxpayers and Illinois income taxpayers—bear most of that burden. 

A Bleak Future for Most Citizens

A recent AARP survey of pre-retirement Baby Boomers found that:

(a)  72 percent believe they will probably be forced to delay retirement, and 50 percent have little confidence that they will ever be able to retire; and

(b)  65 percent have little confidence that they will have the means to live comfortably in retirement.  

Illinois’ state government already spends more on pension costs ($6.75 billion this year) than it spends on schools ($6.2 billion), and this pension cost is going to continue to rise substantially, and thus so will Illinois income taxes.  The book Illinois Pension Scam, published in 2011 by www.championnews.net, contains a wealth of information describing how union teachers’ pensions work.  A special gift from the public sector unions to Illinois’ children is a completely corrupt state government that will damage their lives for years to come.

A Bleaker Future for the Children

Fortunately for the union teachers, the Illinois income tax does not apply to pension income. The people who will be burdened the most by these levels of pensions--and virtually-guaranteed future Illinois income tax increases--are today’s children. When they grow up in a few years, they will bear the burden of huge debt and taxes that is being piled on their backs at the rate of $ 12.6 million per day, according to Governor Pat Quinn. This debt burden is forcing education and social service cuts throughout the state, and it will get worse as it triggers reductions in Illinois’ bond ratings. 

This is the future of today’s students: higher and higher levels of Illinois income taxes that will be their graduation present from Geneva’s union teachers.   Boston University Professor of Economics Larry Kotlikoff has coined a phrase that provides some insight into this spending and tax structure:  “fiscal child abuse."   

It really is all about the children.

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 the input of the public on School Board matters in order to know what the community thinks about these issues.  The Board can be contacted through the Board Secretary at (630) 463-3010 or by emailing Board@Geneva304.org.