What they just did to the Illinois teacher pension system
Tier III pensions and Governor Rauner is smiling.
On Friday evening those of us who are members of the Illinois Teachers Retirement System received an email blast informing us that “significant changes” had taken place to the pension system as a result of the budget resolution, SB9.
The TRS notice explained that the legislature had created a new Tier III which would allow for younger teachers and future teachers (in Illinois but not Chicago) to opt to invest their retirement savings in a private annuity, like a 401k.
The conversion of our Defined Benefit system (DB) to a Defined Contribution (DC) has been a part of the Rauner Turnaround Agenda since he was elected.
Let’s take a step back.
In order for there to be a “Tier III” there had to have been a “Tier II”.
In 2010 the Illinois Democratic legislature, in a nearly secret vote pushed through in less than 24 hours with no hearings or input from anybody, a law that created Tier II for any teacher hired after January 1, 2011.
It was a disaster.
Pension blogger Glen Brown posted in 2015:
According to Bob Lyons, TRS Trustee, “the financial inequities of the Tier II funding and benefit structure must be fixed. Current law requires Tier IIWhat they just did to the Illinois teacher pension system. | Fred Klonsky: