ITEF Comment: Volume 15, Issue 13


By Bill Zettler

Of the top 100 pensions received by retired Illinois government employees, State University Retirement System (SURS) Pensioners receive the ten largest, ranging from $243,000 to $379,000 per year. In fact, these affluent retirees account for 84 of the top 100 largest pensions! What is generally not known is that SURS employees do not pay into the pension system; taxpayers pay it for them, and have since 1981. Over the course of a normal lifetime, these SURS retired employees have become multi-millionaires without ever putting in one dime of their own money.

For example, taxpayers provide the $75,000 employee pension contribution as well as the $205,000 employer pension contribution for coach Ron Zook, who makes $935,000 a year. But taxpayers’ generosity doesn’t end there. SURS employees also pay nothing for their retirement healthcare either. And their healthcare is vastly superior to most workers in private industry, including vision, dental, and life insurance.

While you and I struggle to pay the bills after paying our Social Security, Medicare, and 401(K) contributions, we also are paying for government employees’ vastly superior retirement and healthcare plans. But instead of culling the unfair excesses out of the public employees’ retirement systems, Gov. Pat Quinn wants to raise state income taxes instead. His idea is that you pay for your retirement, you pay for their retirement, and you do that by paying higher state income taxes. In other words, you pay and pay. Government employees, on the other hand, pay nothing.

Tenured State University Retirement System employees have no job risk because they generally can’t be fired, no pension risk since pensions are guaranteed by the taxpayers, and no health-care risk because taxpayers also pay for their superior benefits. Even non-tenured employees have little job risk, as unemployment in the public sector is only 2.6%.

There are more than 5200 employees of Illinois public universities and Chicago City Colleges that earned more than $100,000 in 2007-2008 and have paid ZERO for their soon-to-be multi-million-dollar pensions.

Gov. Quinn doesn’t need a tax increase to help the elderly, sick, and poor. He can free up $300 million just by having these tenured millionaires pay an 8% contribution towards their lavish retirement benefits.

Source: SURS Actuarial Valuation as of June 30, 2008 Page 30.

Bill Zettler is the owner of a computer-consulting firm in Illinois and a contributor to ITEF. Contact him at 847-571-1200.

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2 Responses

  1. Michael McDermott says:

    Therte is an old saying that figures lie and liars figure. Anyone reading this article should pull up the information that is available before accepting these isolated statistics based upon a few employees who have demanded and had provided high salaries and the pensions that go with them.

    I do agree that public institutions pay a high price for some coaches and administrators. This is a choice university boards have made to be competitive. I am also astounded by the salaries, but if you want the best qualified and successful people you must be willing to pay the price.

    However, the majority of professors, instructors and adjuncts make far, far less than these few who drive up the unbalanced statistical aaverages. A professor may make $50,000 – 100,000 per year and their retirement cannot exceed 80% of that number annually. Instructors make far less at $25,000-50,000 per year. While Adjuncts (part-time instructors) make even less and have may have no insurance or retirement. When you take into consideration everyone who teaches in the Higher Education community you find that the statistics are a whole lot lower than in the priivate sector.

    Mr. Zettler also refers to contributions to 401k retirement plans. These are voluntary plans into which employees choose to make contributions. In the private sector most companies provide either a fully employer funded defined benefit plan or a mostly employer funded 403-b retirement plan, plus making matching contributions to Social Security that private sector employees will receive in addition to these retirement plans. However, Zettler fails to mention that state employees do not receive Social Security, nor does the state contribute into social security.

    If you want to make comparisions, let’s compare apples to apples and oranges to oranges, but don’t just throw out a bunch of figures that are isolated personal selections chosen only to attack civil servants who provide the citizens of this state with the services they need and want!

  2. I don’t know where Mr. Zettler got the idea that SURS members do not contribute toward their pension. In fact, the Illinois Pension Code requires SURS members to contribute 8 percent of their wages toward their SURS benefits.

    In his research, he might have read the phrase “employer pick up” and misinterpreted that phrase to mean “employer (taxpayer) paid.”

    Employer pick up refers to Internal Revenue Code section 414h. Under the 414(h) section, members make their contributions toward their pensions on a tax-deferred basis. The language created by the Internal Revenue Code is “employer pick up.”

    However, this does not mean the employer is paying the contributions.

    Linda Horrell
    Communications Manager
    Illinois Municipal Retirement Fund

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