Pension fight explained to CTU retired teachers meeting
Kevin Huber, Executive Director of the Chicago Teachers Pension Fund (CTPF), spoke about what's ahead for teacher pensions, both at the Retired Teachers Association of Chicago (RTAC) luncheon on Tuesday, October 23, and the Chicago Teachers Union (CTU) retirees meeting on Thursday, November 1.
Mr. Huber presented what he called some "scary thoughts and numbers." Presently, the pension active teachers. There is 50 cents in the bank for every dollar owed. In 2001, the fund was 100% funded, but it no longer is because of money owed to the pension fund and a pension holiday in 2011-2013.
The state pays $2.7 billion to the Teacher Retire, the pension fund for all Chicago teachers. Mr. Huber said benefit reform is not needed, but "revenue reform" is needed. He also stated a need for a property tax devoted to our pension fund. He added that a local tax and a common school fund used to be a source of revenue in Chicago, but "we've lost both."
The state of Illinois is not considering taxing pensions, he said, but pending legislation presents teachers with what he says is a "Sophie's Choice" that may have to be considered by retirees. One choice might be a lower Cost of Living Allowance (COLA) or a COLA with simple interest paid rather than compounded interest while retirees would remain in the health insurance plan with the health insurance subsidy. Another choice might mean retirees would keep the 3% COLA while no longer having the health insurance plan or subsidy. The teachers pension is protected by the Illinois State Constitution, but the health insurance is not, he pointed out.
Mr. Huber said that the state considers compounding "too expensive." Any COLA compounding change could start with state teachers and then whatever happens to the state teachers may happen to Chicago Public Schools (CPS) next. He also mentioned that Mayor Rahm Emanuel is asking legislators to suspend COLA for ten years.
Regarding the constitutional amendment on the November 6 ballot, he said the CTPF can't tell pensioners how to vote on it, but unions are supporting a NO vote.
CTPF is seeking individuals who will become "Ambassadors" for the fund and speak to legislators about our needs.
The election of two teacher trustees is being held on Friday, November 9. Jay Rehak and Lois Ashford, the incumbents, are running and have been endorsed by CORE and the CTU executive board.