When I was offered a tenure-track position in 2011 in Illinois, I felt lucky. Tenure-track positions are hard to get. It was a pay cut from my work in California, but it meant stability and security in the state’s pension system — or so I thought.
I focused on my research, won several teaching awards and mentored first-generation students like myself. I started saving for retirement and learned about Tier 2 pensions and why they must be fixed.
Illinois’ public pension system has two “tracks” — Tier 1 and Tier 2. Employees hired on or after Jan. 1, 2011 are in Tier 2. Like my colleagues in Tier 1, Tier 2 members pay 8% of their income into their pensions. That is where the similarities end.
The inequalities between the systems are striking. Tier 2 members must work five more years than Tier 1 colleagues to access benefits, our pensionable salary is capped at a lower level, and the benefits are determined by a less favorable formula. Tier 2’s cost of living increases are also not tied to inflation, resulting in income loss over time.
Bottom line? Tier 2 members pay the same percentage into the system as Tier 1 participants but must work many years longer to receive far less. It is simply unfair.
Why should Illinois taxpayers care about fixing Tier 2?
First, Tier 2 fails to provide adequate retirement income. Illinois educators do not receive Social Security benefits for their time teaching; the state pension is the only retirement income many receive.
Second, Illinois’ Tier 2 pension system likely violates the Safe Harbor provision of the Social Security Act, which requires public pensions to provide retirement benefits that are at least equal to Social Security. To put this into perspective, most taxpayers contribute 6.2% of their income to Social Security. I pay 8%. Tier 2 falls below that equal standard for many participants, jeopardizing compliance with federal law and potentially forcing expensive legal battles. Illinois taxpayers will foot the bill.
Third, Tier 2 creates long-term economic and social costs. Retirees with inadequate pensions rely more on public assistance for food and housing and spend less in their local economies. By providing lesser benefits, Tier 2 ultimately shifts these costs to taxpayers.
Finally, the diminished benefits under Tier 2 pensions make public sector jobs less attractive here, driving excellent educators to states or careers that offer better compensation. Generations of Illinois students could lose out on experienced, committed educators who are necessary for academic success and an educated workforce.
Like so many, I went into higher education knowing that my salary would be lower than in the private sector, but I believed my pension would bridge this gap. If I stay at my institution until retirement, I will have worked for the State of Illinois for 32 years. That should be enough to earn a decent pension.
Illinois public employees deserve better, and our students and taxpayers do, too. We must demand that lawmakers fix Tier 2.
Brooke Johnson, Ph.D., is a sociology professor at Northeastern Illinois University and a member of the Illinois Federation of Teachers.
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