Page 10 - Superintendents Toolkit 2013

 A four-year freeze – as opposed to the six-year freeze from a previous proposal -- on the cost-of-living
adjustment (COLA), and when the COLA resumes not paying it until a retiree reaches age 67 and then
allowing the 3 percent compound COLA only on the first $25,000, the first $20,000 for retirees who also
receive Social Security.
 A requirement to fully fund the state’s pension systems by 2043.
 A stronger guarantee that the state will make its required payments to the pension systems.
Part B includes:
 The provision requiring employees and retirees to choose between the compound COLA or accepting a
reduced COLA but having access to the state’s health care plan and being able to count future increases
for pension benefits.
The Senate passed the choice bill in May of 2012, but only for SERS and GARS. The House never voted on
that bill. SB 1 also includes TRS and SURS, but currently does not include the judges’ system, the stated
reason being to avoid a conflict of interest.
SB 1 also does not include the controversial provision for the state to shift its portion of the normal pension
costs to local school districts, but Senate President John Cullerton (D-Chicago) has said that he expects the
cost shift to be introduced as a separate bill after pension reform passes.
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1. All references to the pension issue should be
framed in the context of constitutionality and
the impact on education. (For example, one long
-range unintended consequence of slashing
pension benefits for educators might be to make
teaching and the field of education a less
attractive pursuit for future college students.)
2. The discussion by superintendents should be
about the impact on teachers and the long-term
effect the cuts might have on attracting and
retaining good teachers.
3. The IASA has consistently said it would support
reform measures to stabilize and sustain the
pension systems as long as those changes are
constitutional, implemented fairly and include a
real guarantee that the state would meet its
pension obligations.
4. Specifically, IASA has said that it even would
support employees paying more for their
promised benefits as long as the amount was
based on actuarial numbers and did not include
paying for any of the unfunded liability caused
by the state skipping its payments.
5. Teachers and school administrators have
faithfully made each and every pension
contribution required of them.
6. Regarding the cost shift issue, IASA’s position
has been that we are opposed to the cost shift
because of the negative impact it would have on
districts already struggling because of the huge
cuts to General State Aid and Transportation the
past few years.
7. If the cost shift must happen, then IASA’s
position is that it needs to be phased in at one-
half of 1 percent per year, that it should be
capped at half of the normal pension costs with
the state retaining half of that cost, and that a
source of revenue must be identified to pay for
the shift to local districts.
8. Reserve funds are not a good revenue source to
utilize as they are a school district’s only safety
net to protect against late or reduced payments
by the state, unexpected costs or to plug the
budget hole for districts that have operating
deficits – which now is about 67 percent of
districts according to ISBE.
9. Even districts that currently pay the teachers’
portion of the pension contributions according
to their labor contract cannot be expected to
use that money to pay for the cost shift because
teachers unions consider that to be part of the
total compensation package.
Talking points: