Chicago teacher contract settlement ends pension “pickup”

Chicago Public Schools and its teachers narrowly avoided a strike this week with a proposed settlement reached just as the clock struck midnight on strike day. A change to how teacher pension contributions are made played a big part in the settlement.

Since 1982, CPS has exacerbated its perennial budget woes by paying the bulk of teachers’ required contributions to the school district’s pension system. That practice will come to an end for all teachers hired after December 31 2016. This means all current teachers will continue to 7 percent of the 9 percent of salary they’re required to contribute paid by CPS. Sweet deal.

This nifty explanation from the Chicago Tribune helps explain how this boondoggle came to be. As is often the case, it seems to be the result of stewards of taxpayer money lacking the intestinal fortitude to face facts and bargain hard. Shrouded in the mists of time is why, back in 1981, district negotiators offered the pick-up in lieu of a raise. But they did. The annual tab for pension pick-up has risen to almost $130 million.

Apparently, CPS made some kind of commitment to compensate new teachers who won’t get the pension pick-up with bigger salary boosts, according to Chicago Teachers Union President Karen Lewis, as the Tribune reported:

“The new hires will not have it, but they will get at some point a salary adjustment,” Lewis said. “So it’s about compensation.”

This doesn’t come close to resolving Chicago’s multi-faceted pension woes. But it’s  a baby step in the right direction.

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