CTU communications regarding Tier Two pension history
[The following article was published by CTU Communications on Sept. 16, 2022, and titled "You deserve your retirement. Let’s fix Tier Two and anti-teacher social security provisions."]
Everyone deserves a secure retirement, especially those who have devoted their careers to public service. The CTU and our parent federations, the Illinois Federation of Teachers (IFT) and the American Federation of Teachers (AFT) are all taking action to fight harmful changes to retirement policies at both the state and federal levels. At the state level, we are determined to beat back the Tier Two provisions that divide CTU members and undermine our retirement funds. At the federal level, we are fighting two unfair social security policies that impact Illinois retirees.
Illinois: Fight Tier Two changes to the pension system
Since 2011, Illinois has established second-class pensions for newer employees. CTU is organizing to push back these changes and we need your help. Sign up to join the Pension & Insurance Committee’s Tier Two Subcommittee at ctulocal1.org/committees. We are mobilizing the power and the ingenuity of our members to fight these provisions that undermine retirement security for members under both the Tier One and Tier Two plans.
Tier Two History
Back in early 2010, a steady drumbeat of anti-teacher and anti-pension rhetoric had been allowed to build up both nationally and in Illinois. The attacks on teachers and public employees had been going on for years with much too little challenge from unions and our allies. In this climate, Illinois passed bills establishing second-tier pensions for future employees. Because they were not changing benefits for already-existing employees and pensioners, they were allowed to make these changes without the pension protection provisions of the Illinois Constitution stopping them. Thus was born the infamous Tier Two.
The goal of this legislation was to drive a wedge between those already paying into the pension and those who would pay later. The law encouraged members to opt out of state pensions. They hoped this would further undermine pensions, whose funding levels had already been damaged by politicians’ and the district’s refusal to make promised payments.
For example, in the case of the Chicago Teachers Pension Fund, state law established in 1995 diverted state pension payments earmarked for the (then fully-funded) CTPF into CPS coffers—with only a promise that CPS would start paying into the pension when its funding level dipped below 90 percent. Of course, when that actually happened, CPS asked the State for a pension default to skip out on the promised payments. Sadly, politicians obliged.
This is the source of the pension debt about which CPS constantly complains. The district is saddled with debt because they raided our pensions and they still owe that money they snatched away from their own retiring employees. In addition, by the time politicians and CPS had been cheating CTPF for 15 years, the funding level had dipped dangerously low—providing politicians with an excuse to cut benefits for future pensioners by establishing the Tier Two plan.
CTU fights to fix the pension mess
In recent years, the CTU has won significant victories to secure the CTPF. In 2016 we won a huge victory when the state reinstated the CTPF tax levy. That levy restored the funding that had been diverted into CPS’ coffers in 1995 and which the district used to shortchange our fund. This is an important start to reversing the attacks on our pensions.
