Last month the Better Government Association reported on a widespread – but little-known – practice in which public school districts agree to cover all or part of their employees’ share of pension contributions.
Now, Chicago Public Schools may be trying to end these so-called pension “pick-ups,” according to the Chicago Teachers Union.
By law, public school teachers and administrators in CPS have to contribute 9 percent of their salaries to the Chicago Teachers’ Pension Fund. There’s a loophole in the law, however, that allows the school district the option to make contributions on behalf of its employees.
Currently, CPS is paying 7 percent of the employee share while teachers are paying the remaining 2 percent – an arrangement that was negotiated in the 1980s and has been in the union contract ever since, according to the district.
With contract negotiations underway, CPS has now targeted pension pick-ups for the first time – at least since the current union administration took over in 2010, said CTU spokeswoman Stephanie Gadlin.
Cutting the benefit would amount to a “whopping” 7 percent reduction in pay, according to a press release from the union.
A spokesman for CPS said “we don’t discuss contract negotiations” and declined to comment further.
But the district previously told the BGA that pension pick-ups cost CPS about $175 million per year.
CPS is not the only agency with pension pick-ups. The BGA surveyed 10 suburban school districts and found that half of them pay for all or part of the employee contributions on behalf of their teachers.
All of them also covered pension contributions for their superintendents – a benefit that added up to an extra $22,600 in compensation on average per person in the 2013-2014 school year.
Click here to read the full report.
This blog post was written by the Better Government Association’s Katie Drews, who can be reached firstname.lastname@example.org or(312) 821-9027.