Wilcox calls for 401(k)-style pensions for all new teachers
A 401(k)-style pension system for newly hired teachers is the remedy Col. Craig Wilcox, a Republican candidate for Illinois state Senate, recommends to combat the practice of pension spiking.
Many local school districts habitually give raises and sick-time bonuses to teachers about to retire, according to a July 23 report on the Illinois News Network (INN) website.
Wilcox said the findings show spiking teacher pay pre-retirement has “become the expectation.” A member of the McHenry County board of directors, the retired colonel is running for the District 32 Senate seat against Democrat Mary Mahady.
“The evidence shows these strategies are compounding the fiscal issues that Illinois is confronted with, and the economic climate has created conditions that require everyone in the state to tighten their belts,” Wilcox said in an interview with the McHenry Times.
The practice persists despite a rule established by the legislature in 2005 charging school boards a penalty when an end-of-career raise tops 6 percent, Wilcox explained. He noted that even a recent drop in the limit to 3 percent “may not completely solve the problem.”
“I believe we must work toward moving new teachers, and other new state employees, into self-managed 401(k)-style plans to avoid further compounding the pension-promise problem,” he said.
The INN report blamed “hefty end-of-career raises” that give teachers larger pension benefits once they retire, for costing Illinois taxpayers $50 million in penalties
“At one point, 20 percent annual raises were common for educators preparing to retire,” Brett Rowland said in the INN report.
This discovery comes at a time when Springfield has been embroiled in a budget crisis and amid reports from the Illinois Policy Institute that the state has one of the highest property tax burdens in the U.S.
“We should be discussing how to reward and celebrate our best teachers for what they do, but we cannot focus on that if we continue to kick the pension crisis down the road,” he added. “If we don't implement change now, we will soon be talking about bailouts for insolvent funds based on these systemic issues.”
District 32 includes parts or all of Lake and McHenry counties, including the cities of Crystal Lake, Harvard, Marengo, McHenry and Woodstock.