Pension Pick Up Explained Once More

Pension Pickup Explained – Once More. And Once Again...

On May 21st, the Chicago Tribune, following the dictum that repetition will engender belief even if it is without facts, published another of its many, many editorials condemning the pension pick-ups for the CTU as negotiated by the CPS.

According to the editorial "Confidence Game," …Lewis says Claypool is failing the district by threatening teacher layoffs and for proposing in last year's contract negotiations that teachers pick up more of the employees' share of their pension costs."  Note: what follows is contrived digs like "the same sharer as other workers pay…"

I provide once again an explanation of "pension pick-ups" and how they are used by the CPS to clothe themselves in the appearance of hard-lining negotiations and later using their self-serving transactions to  paint the teachers' union as the villain.

FROM AUGUST OF 2016.  

I am reprising an earlier post of more than a year ago to once again clarify the CTU’s arrangement with CPS over the years with the teacher pension contribution, which will come up again quickly as evidenced by the Tribune’s Kristen McQueary’s latest misinformative rant on August 12, 2016.  “Karen Lewis would better serve CTU by standing up to its radical faction.”

I first met Ms. McQueary some years ago in the Tribune Tower with my good friends Merle Taber and Glen Brown.  She was excited about her recent membership in the Editorial Board’s writing staff. Since then, she has wrought herself and her writing to brandish boldly many of the extreme positions of the Illinois Policy Institute or other anti-union/pro-Rauner views.  

This week, McQueary unwittingly tells the reader the truth. 

“’CTU President Karen Lewis: ‘The Chicago Teachers Union has been clear.  If the Board of Education imposes a 7 percent slash in our salaries, we will move to strike. Cutting our pay is unacceptable, and for years the “pension pickup” as the board has called it was part of our compensation package.  This was not a perk.  This was negotiated compensation with the Board of Education.’” 

McQueary focuses on the word “SLASH” as a connotative grenade in the quote, but she ignores the basic truth: the pick up was part of a negotiated settlement over years that left the union receiving salary increases commensurate with expectations in the private world, but appeared to end with a lesser increase to the CTU thereby making the CPS seem all the more like frugal stewards of the taxpayers’ money. 

It happens all the time - and in districts across the state. 

Despite knowing this last truth, she piles on with “teacher salary increases far outpace the cost of living.”  But McQueary fails to consider additional material and research – like cost of living, resources, and trends for educators in the classroom.  Federal statistics show that Illinois teachers are falling each year behind the curve for cost-of-living stasis.  In fact, since 2000, there has been a 6.9% decrease in meeting trhe needs of cost of living.

http://nces.ed.gov/programs/digest/d13/tables/dt13_211.60.asp

And, quite often they supplement their classrooms with supplies, materials, and even lunches/breakfasts without remuneration.  

From the earlier post:

The Illinois Policy Institute is angry once again with what their editorialist Diana Sroka Rickert considers another unnecessary handout to Chicago teachers:  the Pension Pickup. 

In her December Tribune editorial last week, Rickert urged Chicago’s besieged Mayor Emanuel and CPS CEO Forrest Claypool to end the current practice of providing pension pickups for the Chicago Teachers Union. 

“While (they) have busied themselves asking state taxpayers to send hundreds of millions of dollars Chicago’s way, they’re unwilling to use the $174 million that’s already available for them to use for teacher’s pensions.”

But they’re not the peculators.  The real culprit?  Read on, please.

Chicago teachers are supposed to pay 9 percent of their salaries toward their own retirement savings.  But instead, teachers pay just 2 percent; the rest of the “teachers’ contribution” is picked up by taxpayers, thanks to a clause negotiated into their contract6s in the early 1980s.”

“

As a retired educator from a suburban district I suppose I could feel a little miffed with having paid 9.4% of my salary each paycheck, instead of 9% like those in the CTU.  Adding to that, if CTU paid only 2% of the 9%; well, why didn’t I get such a deal?

And that’s exactly what Rickert and the IPI want all of us to do.  Let’s not think it out or look into it.  Let’s just be blind angry. 

The “deal” that Chicago teachers got in the early 1980s was actually a mandated law by the General Assembly in 1983.  And this statute (40  ILCS 5/17-130.1) provided the opportunity for retirement contributions to be considered part of the negotiating process in salary and benefit settlements during collective bargaining.  In fact, all districts in Illinois got the same deal.

“An Employer or the Board may make these contributions on behalf of its employees by a reduction in the cash salary of the employee or by an offset against a future salary increase or by a combination of a reduction in salary and offset against a future salary increase.” 

Teacher’s Union:  We’d like to ask for a 2% increase in our wage benefits across the board this next contract.

Board of Education:  We’d like to find a way to do that.  How about a ½% increase across the board, and we’ll pick up 1.5% of your contribution costs per person?

If` you’re still not sure how this works, it means that my union never debated with the Board over my 9.4% payment.  But just down the highway at another district near the airport, they did and paid only 4% of their 9.4% requirement. 

What Rickert is not telling us – and I believe on purpose – is that the statute in 1983 was not a prosperous honeyfuzzle by the unions.  The statute was a smartly designed legal mandate for flexibility for negotiators on both sides, one that might have prevented strikes.  Think of it as an offer to use pension contributions as one part of a package of benefits for working in a specific district – and in Chicago.

And if you were lucky enough to get “such a deal,” you were still on the hook for the required taxes and costs so associated.  The amount negotiated could never “exceed the employee contribution required by Section 17-130 for all employees…”  Likewise, such contributions by a Board or Employer were also to be treated “as employer contributions in determining tax treatment under the United States Internal Revenue Code.“

Now that I know a bit more, maybe the grass wasn’t so much greener over by the airport.  Or even for teachers in the city of Chicago. 

And Union leader Karen Lewis?  She knows that regardless of a Supreme Court unanimous decision acknowledging the thievery of the state and the city, they’ll still keep coming.  She knows that Claypool and Emanuel want to take the pickup away, even after it has been an integral part of contract negotiations for over 30 years.

She knows, like Rickert doesn’t want us all to know, that that 7% in contribution pickup has been traded over the three decades for give-ups in salary, benefits, and working conditions. 

And it made CPS look good. Real good.   

And this is why the Chicago Teachers Union is taking a vote this week on whether they will strike. 

They know the Mayor, Claypool, the IPI, and they understand what a pension pickup is.

Now you do too.