The Social Security benefit is tied to inflation. My teacher pension is not.
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I didn’t start teaching until I was 38 years old.
Prior to that I worked a lot of different private sector jobs. Everything from a steelworker to tire builder. All during that time I paid 6% into Social Security and my boss paid the other 6%.
When I started teaching I was entered into the Teacher Retirement System and paid 9.4% into TRS every paycheck. Many, many years the state of Illinois, which is responsible for paying a share into the system, failed to pay anything.
That is the reason the pension system is only 40% funded.
When I was paying my 6% into Social Security, if my boss didn’t match it with their 6% they could be charged with a crime.
There are no consequences for the state of Illinois failing to meet its pension obligation.
What about all those years that my bosses and I paid 12% into Social Security.
It’s mostly gone. It was stolen by the federal government using two laws called the Windfall Elimination Provision and the Government Pension Offset (WEP/GPO).
Nobody warned me that when I became a teacher most of the money that I and my employer paid into the Social Security System would be taken from me.
Government theft of the retirement benefit only applies to those who change careers to public service and enter a public pension system.
Another way we are penalized in retirement is that the TRS is not tied in anyway to the cost of living.
Illinois teachers receive a yearly increase of 3% compounded no matter what the change in the cost of living is.
For most of the past twenty years of stable cost of living increases we basically kept pace.
Not now.
For a year we have been victims increasing inflation yet our TRS benefit is unchanged.
This coming year Social Security will increase for most retirees by 8.7% in response to inflation.
Social Security benefits for 2023 have a built-in, automatic protection against inflation.
Not TRS pension benefits
The Social Security benefit tied to inflation only began in 1975, following legislation enacted by Congress in 1972.
The Cost of living is not static. Social Security benefits reflect that. TRS benefits do not.
I offer three suggestions:
Congress should repeal the WEP/GPO.
The Illinois legislature - which once again has a Democratic super-majority - should enact pension reform that re-amortizes the pension debt and pay what it owes.
The Illinois legislature should tie pension increases to the cost of living with a floor and a ceiling.
Good retirement benefits are not “generous”. They are not a gift. They are earned. They are not a “blessing”. No more than a livable wage or good healthcare are blessings. The shame of America is that every older person does not have these things. But the attitude that retirement benefits are gifts and blessings will ensure that we remain an international outlier when it comes to how we treat our elderly.
"Overall" is the operative word. Overall, we have kept up with inflation. But we didn't need a crystal ball to know that a time would come when inflation would get worse. That's why we need a floor and ceiling. 3% is the minimum. And for teachers who have just been retired for a couple of years, they haven't done well. But realistically, it won't happen.