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Tue May 28, 2013
Rep: Pension Shift Would Cost Schools Nothing
Members of the Illinois House continued pushing for their version of a pension overhaul Tuesday. The latest twist could affect how public school teachers' pensions are funded. Brian Mackey has more.
One of the more contentious issues in the debate over government pensions in Springfield has been who should pay for teachers' retirement benefits.
Teachers pay part of their salaries toward their pensions. But for years, state government has paid the employers' share of pension costs, at least for every school district outside Chicago. House Speaker Michael Madigan calls that a "free lunch," and says local school districts ought to pay for their own employees.
Legislation to carry out this so-called cost shift has been controversial; Downstate and suburban lawmakers whose districts would be affected say it would result in property tax increases.
But Rep. Elaine Nekritz, D-Northbrook, says under the House's version of a pension overhaul, that's no longer an issue.
"If Senate Bill 1 passes, there would be no shift, because the employer normal cost would be zero," Nekritz says.
Basically, that means so much money would be saved by slashing benefits and increasing employee contributions, it wouldn't cost the schools anything.
The Democratic leaders of the House and Senate remain deadlocked over the best approach to fixing Illinois' $100-billion pension problem.
Pension Cost Shift