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Teachers unions monitoring "two-tier" pension discussion
By Matt Arado | Daily Herald Staff
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Published: 5/30/2009 12:00 AM

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Teachers union representatives are keeping a watchful eye on state legislators this weekend to see if they will take up a proposal to split the teacher pension system into two tiers.

Gov. Patrick Quinn included the proposal in his budget plan. It calls for a number of changes to the state's pension system, including raising the age at which teachers could retire with full benefits from 55 (with 35 years of service) to 62. Teachers would earn less in benefits each year, and annual cost-of-living raises for retirees would be tied to the Consumer Price Index, instead of being a flat 3 percent.

The changes would apply to new hires only. Existing teachers would continue to receive their existing benefits.

It's unclear whether the plan will be considered during a whirlwind end-of-session weekend in which legislators have considered a proposed income tax hike and sweeping ethics reforms.

"It seems to have lost some steam, but anything is possible," said Charles McBarron, spokesman for the Illinois Education Association.

Katie Ridgway, a Quinn spokeswoman, said Friday that the proposal is "still part of the conversation."

The proposed pension changes apply to employees served by all five of the state's pension systems, not just teachers. But the education unions have been particularly vocal in their opposition to it.

The IEA and the Illinois Federation of Teachers believe the proposal would discourage young people from entering the teaching profession in the future. They also say it "punishes" teachers for a mistake state leaders made - namely, decades of underfunding of the Teachers Retirement System.

Quinn has acknowledged past failures to fund the system, but he believes that a reduced pension plan is required to ensure the long-term sustainability of the funds. The governor's office estimates that the proposal would save taxpayers as much as $150 billion between now and 2045, when the pensions are supposed to reach a 90-percent funding level.

The unions dispute that claim. A fact sheet on the IFT Web site suggests, for instance, that the later retirement age would force school districts to employ their highest-paid teachers longer, putting a bigger salary burden on local taxpayers each year.