Why Don't VVSD Teachers Pay Their Share of Pension Contributions?

According to Illinois state law, teachers are required to contribute 9.4 pecent of their salary into the pension system.  

But Valley View teachers do not pay their legally mandated 9.4 percent teacher contribution. Their contribution is paid for by district taxpayers as part of the negotiated teacher contract known as “pick ups”.

So not only are Valley View taxpayers on the hook for the school district portion of 0.58 percent, and the state match of 9.4 percent, they are also on the hook for the teacher portion of 9.4 percent.

The Illinois Policy Institute conducted a study of exactly how much teachers contribute to their pensions due to the financial instability of the state pension system. The report titled, Teacher Pensions: Who’s Really Paying? found that out of Illinois’ 867 school districts teachers made the full contribution in just 312 (36 percent) districts, partially contributed in 139 (16 percent) districts, and in 416 districts (48 percent), teachers made no contribution at all into the pension system.

Consider that in 2010, the state, a.k.a. taxpayers, contributed more than $2.2 billion to the Teacher’s Retirement System, “TRS”, to cover the 9.4 percent state match of the pension benefits. Here in Valley View, according to the IPI study, in addition to the 0.58 percent of the district portion of the benefits, district taxpayers also paid an estimated $8.4 million to cover the full 9.4 percent teacher contribution of the pension benefits!

Are VVSD teachers paying their fair share if they pay NO share towards their own pension benefits?

The report goes on to show that the pension “pick ups” are an employee benefit – not part of the base salary. This is confirmed by the TRS handbook:

• Definition of creditable earnings: “any portion of the 9.4 percent member retirement contributions paid by the employer as a benefit (See “Employer-paid  9.4 percent retirement contributions”), and;
• “Employer-paid 9.4 percent retirement contributions: An employer’s payment of any portion of the 9.4 percent retirement contribution is referred to as the “salary schedule add-on method.” Employers using this method agree to pay all or a portion of the 9.4 percent member contribution in addition to the salary schedule amount. This method results in an employer cash outlay in excess of the member’s salary schedule amount.”

School districts self-report to the Illinois State Board of Education, “ISBE”, on the annual ISBE Teacher Salary Survey exactly how much of the teacher pension contribution district taxpayers “pick up”. VVSD self-reported for atleast the past five years that all or 9.4 percent of the TRS teacher pension contribution was “picked up” by district taxpayers as part of the union negotiated contract.

• 2011 ISBE Teacher Salary Survey, page 63
• 2010 ISBE Teacher Salary Survey, page 63
• 2009 ISBE Teacher Salary Survey, page 61
• 2008 ISBE Teacher Salary Survey, page 61
• 2007 ISBE Teacher Salary Survey, page 61

Seeing that Illinois has the worst funded pension system in the nation, with an unfunded pension liability in excess of $80 billion, is it too much to ask VVSD teachers to contribute their legally required portion towards their own pension benefits?

We have experienced teacher layoffs and program cutbacks because VVSD is running chronic budget deficits, the latest being $7.2 million. Unknowingly, district taxpayers have been funding the teacher legally mandated pension benefit share, an estimated $8.4 million in 2010 alone. Where is the fairness here?

This is one more disturbing example of just how much taxpayers are taken for a ride by out of control teacher union leadership and politically bankrupt school board members.

And it’s also one more example of why teacher union contract negotiations are conducted in secret.

How else do you think $8.4 million could have been spent in 2010 to help educate VVSD students?