Tag: spiking

Pension spiking costs continue to hit Illinois taxpayers

Mary Pat Campbell

Link: https://www.thecentersquare.com/illinois/pension-spiking-costs-continue-to-hit-illinois-taxpayers/article_b899de84-a53e-11ec-b683-6bf4098dc466.html

Excerpt:

School districts sent $8,839,754.35 to the Teachers’ Retirement System of the state of Illinois to cover the cost of excess salary and excess sick time payments given to educators at the end of their careers in years 2018-2019 and 2019-2020, according to records obtained by The Center Square. That’s on top of the more than $50 million in penalties districts have paid to TRS since the 2005 law passed, including $23.8 million since fiscal 2014. But districts only paid a fraction of what they actually owed due to exemptions built into the 2005 law.

“In the first 10 years of the program, 2005 to 2015, the excess salary contributions levied against school districts totaled $149.5 million, or an average of $14.95 million per year,” said Dave Urbanek, director of communications for the Teachers’ Retirement System of the state of Illinois. “However, because of exemptions to the 6% threshold built into the law at that time, districts paid only $39 million during that decade, or an average of $3.9 million per year.”

State Sen. Craig Wilcox, R-McHenry, said some local taxpayers probably aren’t aware of how school districts are spending tax dollars. The majority of school district funding in Illinois comes from local property taxes. Most national analyses show Illinois residents pay, on average, the second highest property taxes in the U.S., behind only New Jersey.

Author(s): Brett Rowland

Publication Date: 18 Mar 2022

Publication Site: The Center Square

This Local Pennsylvania Police Pension Fund Is About to Run Out of Benefits. How Did That Happen?

Mary Pat Campbell

Link:https://www.ai-cio.com/news/this-local-pennsylvania-police-pension-fund-is-about-to-run-out-of-benefits-how-did-that-happen/

Excerpt:

But of all the struggling pension funds in Pennsylvania, the pension system in the city of Chester was shown to be the most underfunded municipal public pension plan in the entire state in 2019. And now, that situation has gone from bad to worse.

Reports say the pension will run out of money in less than four months, according to Philadelphia’s PBS station, WHYY. One of the primary reasons for this situation appears to date back to 2009, when the pension board adjusted the pension calculation procedure. These adjustments seem to have made it easier for some police officers to spike their pensions.

Under the 2009 change, police officer pensions in Chester were calculated using the salary of the final year of service, which may have encouraged some officers to work overtime as much as possible in their final year in order to inflate their pensions, according to the state’s appointed receiver. In October 2021, this rule was changed so that calculations will now be based upon the last three years of service. 

This one-year policy, combined with the practice of spiking among approximately 80 police officers, appears to be the cause of the pension system’s lack of funding. Officials are hoping to recoup some of the overpayments to retirees, and they are expecting future payments to be reduced significantly.  

Author(s): Anna Gordon

Publication Date: 10 Jan 2022

Publication Site: ai-CIO

‘Pension Spiking’ For D-86 Teachers Under New Pact

Mary Pat Campbell

Link: https://patch.com/illinois/hinsdale/pension-spiking-d-86-teachers-under-new-pact

Excerpt:

The Hinsdale High School District 86 board on Thursday approved a two-year agreement with the teachers union, including a “pension spiking” provision and relatively small pay raises.

The agreement is retroactive to the beginning of the 2020-21 school year. Over the two years, teachers are expected to see base salary increases amounting to 2.2 percent.

Under the agreement, the teachers will now get 6 percent annual increases in the last four years of their careers, up from the current 3 percent.

Author(s): David Giuliani

Publication Date: 29 January 2021

Publication Site: Patch

Public Pension Roundup: Reform And Regression

Mary Pat Campbell

Link: https://www.forbes.com/sites/ebauer/2021/02/19/public-pension-roundup-reform-and–regression/

Excerpt:

Now, generally speaking, when an employer switches from a traditional pension to a defined contribution plan, this means a significant drop in plan benefits for employees. In Florida, that’s not the case — at least nominally not so: the employer contribution rate is the same for either type of plan, and varies only by employment class. (Of course, this doesn’t take into account any additional contributions needed to remedy funded status.) In addition, regular readers will know that I insist whenever the opportunity arises that state and local employees should participate in Social Security just as much as the rest of us do; as it happens, that is already the case for public employees in Florida. In addition, unlike the 8 year vesting of the traditional pension plan, the employer contributions to the defined contribution plan vest after only a year of service.

Author(s): Elizabeth Bauer

Publication Date: 19 February 2021

Publication Site: Forbes

How the Police Bank Millions Through Their Union Contracts

Mary Pat Campbell

Link: https://www.propublica.org/article/new-jersey-police-contracts

Graphic:

Excerpt:

Despite attempts to rein in police union contracts in New Jersey, costly provisions remain common, an unprecedented analysis by the Asbury Park Press and ProPublica found. The news outlets identified contract clauses throughout the state that protect officer payouts that cost the public hundreds of millions of dollars.

In 2010, state lawmakers passed a law to stop huge retirement payouts for unused sick days, but taxpayers are still funding the largesse. North Bergen approved generous payments to four retiring officers in 2019, including a sergeant who got $75,330.32 for unused sick time. Some retirement payouts can be even higher. In 2017, a chief in Jersey City collected more than half a million dollars.

The debt for unused sick time and vacation time, which is largely dictated by the contracts, totaled at least $492.9 million for municipal police alone in 2019, according to a review of town budget records. The liability is primarily due to officers who were hired before the 2010 law passed.

Author(s): Andrew Ford, Asbury Park Press, and Agnes Chang, Jeff Kao and Agnel Philip

Publication Date: 8 February 2021

Publication Site: ProPublica