Pension Woes and Layoffs for Teachers - So What's New?

By Jim Vail

Second City Teacher

Everyone who reads the papers should know by now that the people at the top have a plan to eliminate everyone's guaranteed pensions.

They did it to the corporate workers, they are doing it now to the public sector workers.

The Chicago Tribune is reporting glaring headlines of massive teacher cuts on the horizon due to the pension woes.

Here was the lead paragraph to the Tribune story today entitled "Emanuel Sees Tough Choices on School Budget,"Mayor Rahm Emanuel on Wednesday sought to lay the blame for upcoming Chicago Public Schools budget cuts on state lawmakers' failure to extend pension relief, saying the loss in Springfield is now "on the doorstep of every school and every classroom in the city of Chicago."

"The mayor refused to rule out teacher layoffs or a property tax increase as pension payments are expected to balloon from $196 million this year to $612 million in the next budget year, which begins July 1."

So the mayor, playing his role to the hilt, is saying he will have to lay off more teachers or raise property taxes if the state does not pass a pension reform bill.  

The state did not pass a pension reform bill this past week.

Now, the next point in the article had me raise my eyebrows.  

It stated that City Hall and the Chicago Teachers Union had negotiated a two-year extension of the pension holiday that would have once again allowed CPS to avoid paying the full amount.

I know the union we just recently elected has been fighting hard to protect our pensions and make sure CPS pays what it owes to the pension fund.  But if this statement is true, it calls into question the whole fight.

I'm sure there is an explanation for it.

I emailed our great pension trustee Jay Rehak, and the CTU's communications director for clarity. We'll report the facts when we get them.

In either case, it doesn't look good at all if CPS can get away with not paying what it owes into the pension.

But let's be realistic, boys and girls.

Our pensions are on the cutting blocks.  Corporations which rule the roost here in this land, have no intention to pay worker pensions.  

They want everyone to go to a 401K, leave it up to the markets to decide your future pension.  Consider that a 401K was never intended to be a pension, but rather a supplement.

House Speaker Michael Madigan had a bill that would have been harsh.  But it was a feeler, to see what the ruling class is up against to cut pensions like they're doing across the Atlantic.

While Madigan's pension bill SB1 did not pass, here are some highlights from it according to the Illinois Federation of Teachers:

- it would deeply cut Cost of Living Adjustments, by up to 50%;

- raise the retirement age by one year for people ages 40 - 44, three years for people ages 35 - 39, and anyone under 35 -would work five more years [already new CPS teachers hired today can't retire til they're  67, similar to Norway);

- limit the amount of salary that earns a pension;

- by July 2014, employees would begin paying 2 percentage points more on their paychecks toward their retirements, or roughly $1200 more per year if earning $60,000

- would contractually mandate the state put pension payments ahead of most other state expenses, including education or social services.

So teachers still have a defined benefit retirement plan, but governments elsewhere are starting to shift toward defined contribution plans similar to 401(k)s. 

Illinois is Broke - We Are One.

Wanna guess who's going to win this battle?