How to pay for an ill-equipped Illinois teacher pension
Illinois is the latest state to offer a pension to retired teachers in a move that will leave more than 4,000 of its roughly 100,000 educators unable to get it.
The Illinois State Teachers Retirement System (ISRS) announced Tuesday that it would pay retired teachers $10,000 in lump sum payments each year starting in January 2019, and that the state’s public schools will provide the payments for the rest of the year.
The state has been trying to attract retired teachers to its system since 2011, when it opened the retirement system for the first time to make it easier for teachers to receive the payments.
Illinois teachers are eligible for about $2,500 a month in retirement benefits, with an additional $1,500 in lump-sum payments for up to 15 years.
The payments will be in addition to state and federal funding for teachers in retirement, according to a news release.
“Illinois has been an outlier when it comes to its teacher pension system, with a system that was created in the 1970s to ensure that teachers are well compensated and not left to fend for themselves in retirement,” said Michael J. Ruprecht, senior vice president and chief financial officer at ISRS.
“Our plan ensures that the money will be there for future teachers to repay the costs of their education, and we will continue to make sure teachers are able to retire with dignity and security.”
Illinois is one of several states that have chosen to give retired teachers a lump sum pension in lieu of the state teachers retirement system, which provides $5,200 in annual pension payments for retired teachers.
Illinois has also begun to reduce the payments that retired teachers receive, starting in 2019.
In 2016, the state paid $1.1 million in lump sums, according, according the Illinois State Personnel Board.
Illinois schools have also been providing teachers a $10 million state-funded retirement benefit package since 2010.
The plan is similar to the plan that was in place in California, where the state replaced the public schools with a teacher-controlled plan in 2017.
The teachers-controlled system provides a higher retirement pension for teachers, who are also eligible for a higher monthly pension payment.
The new Illinois plan also reduces teacher retirements and the cost of maintaining the system, according ISRS’ press release.
Illinois also plans to make teachers eligible for $2 million a year in supplemental funding from the state.