GIVE 'EM A MILLION, SAVE A BILLION
May 9, 2006
Retired Illinois teachers receive abnormally large pension benefits at the public's expense. In fact, it might be cheaper to just give retiring teachers one million dollars to invest however they wish, says Bill Zettler, a retired computer software engineer.
Zettler studied the Illinois Teacher Retirement System and found that:
- More than 1,100 retired teachers in Illinois receive more than $100,000 a year from their pensions.
- The biggest pension is $325,000 a year. Bill Clinton's pension is just half that amount.
- Zettler's neighbor, a former Illinois teacher, retired at age 55 receives $9,000 a month in pension benefits.
- The average teacher in Illinois, who retires after 34 years, has a pension worth well over a million dollars over their expected lifetime.
- Many teachers' pensions have more than two million dollars, and three million dollars for administrators is not unusual.
Zettler doesn't expect the General Assembly to entertain his notion, but he says the idea illustrates a point:
- By giving newly-retired teachers one million dollars up front, Illinois taxpayers would save billions of dollars over the long term.
- Furthermore, teachers could go to any mutual fund site and calculate an annuity indexed for inflation starting at age 55.
- If they put their million dollars into an annuity at age 55, they could get $40,000 a year back.
This doesn't include any money the teacher may have saved or invested during his or her years of working.
Source: Steve Stanek, " 'Give 'em a Million, Save a Billion,'" Heartland Institute, March 2006.
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