STUMP » Articles » Chicago Pension Watch: Teachers Pensions -- What are the Benefits like? » 7 June 2015, 12:54

Wirepoints pointed out this lovely letter to the editor to me:

In a classic case of buyer’s remorse, the Sun-Times bends over backward to justify its unabashed cheerleading of Bruce Rauner as the right governor for Illinois. This is despite his insistence on savage cuts to heat aid, essential housing and health services for the elderly, toddlers and the poor. Despite Rauner’s radical attacks upon working people, their unions, their retirement security and the essential services they rely upon, the Sun-Times continues to trumpet his credentials as a reformer.

We cannot forget who Rauner really is. He is a rich stock trader who specialized in corporate takeovers.

Illinois is not broke. Illinois is flush. The problem is that those who can pay, don’t. The effective state income-tax rate for the poorest 20 percent of earners in the state is double what the wealthiest 1 percent of people pay.

If Rauner and his friends on Wall Street were truly serious about providing a high standard of living to the people of Illinois, they would join their fellow billionaire Warren Buffett and ask the wealthy to pay their fair share. If Illinois were to sue banks for toxic swaps and predatory fees, restore progressive elements of the state corporate and income tax, properly tax La Salle Street and profits that are sequestered in off-shore tax-free accounts, and tax luxury services, we would have state surpluses instead of deficits.

The new governor would do better to solve our budget woes by using his bully pulpit to demand tax fairness and put Illinois on the path to fiscal recovery.

Jesse Sharkey, Vice President
Chicago Teachers Union

Nice name for a lovely person.

Jesse, let me point you to what happens when you try to make the rich pay their “fair share”.

And that’s Connecticut , where you have nice places to sail a boat and you’re between Boston and New York City, two places with a hell of a lot to offer.

What’s on offer in Chicago, hmm? Ersatz pizza and Lake Michigan? Please.

And don’t try to make Silicon Prairie happen.

It’s not going to happen.

CHICAGO TEACHERS RETIREE BENEFITS

I’m giving the Chicago Teachers plan the multi-post treatment, and for today we’re going to look at what the benefits in 2014 looked like. Thanks to Ted Ballantine at Pensions 360 for giving me the underlying data to this heatmap. My summary data can be seen in this google doc. Let’s look at Ted’s original heatmap:

So that’s a peak just under $60K at about 35 years of service.

Remember, this is what the TRS heatmap looks like

Notice the Illinois TRS benefit comes in a bit higher than the Chicago Teachers amount.

Let me do my own graphs, like I did with the others.

First, here is the histograms for the annual benefits in 2014.

As with other plans, very few get superlarge pensions, and the mode is near $60K, as we saw with the heat map.

AVERAGE BY YEARS OF SERVICE

This is a nice little graph, showing how many people had certain years of service, and give that amount of service, what the average pension benefit was:

Okay, most people served 30-40 years (as shown with the blue line pattern), and the average benefit increases with years of service. That is partly indicative of a large plan where people have fairly uniform pay and benefit structure.

RANGE OF PENSIONS BY YEARS OF SERVICE

Finally, we will look at how pension amounts are distributed by years of service:

There is a little bit of graphical tomfoolery here — I got tired of the maximum pensions distorting the graph (the largest pension amount is over $700K), so I capped the graph at $200K so we can see the boxes better.

The blue solid rectangles run from the bottom at the 25th percentile pension amount for that particular bucket, and goes up to the 75th percentile at the top. The skinny vertical line runs from the minimum amount, to the maximum amount (if the axes didn’t cut off the top).

Overall, the middle 50% of retirees in Chicago Teachers are paid $32K to $64K.

As per, the Public Plans Database, those in Chicago Teachers do not get Social Security benefits. (Mind you, Social Security doesn’t get you much. The highest benefit for 2015 is about $32K for the year and the average amount is about $16K for Social Security retirees.)

So the 25th percentile for a full career in Chicago Teachers is at about the maximum Social Security benefit.

I am sure many of the Chicago Teachers retirees consider their pension amounts to be reasonable, as these are lower than their salaries were.

Thing is, when the money runs out, you can try to get rich folks to cough up to make up the gap, but they may feel like fleeing the Silicon Prairie for less onerous climes.

Compilation of Chicago posts.