The recommended percentage of salary both schools and teachers need to contribute for teachers taking early retirement has decreased, according to the Commission on Government Forecasting and Accountability.
Actuary Matthew Strom recommended in a letter to COGFA to drop by 25 percent the lump sum ERO contribution rates for both the member and employer.
The actuary suggested the member contribution be lowered from 14.4 percent to 10.8 percent and the employer contribution from 29.3 percent to 22 percent.
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Democratic Representative Elaine Nekritz says it’s a message for school districts.
“If you’re going to offer early retirement benefit,” Nekritz said, “this is the percentage of the salary that your employee, the teacher, and you (the school district) have to put into the pension system.”
“These are simply actuarial calculations that then COGFA notifies -- it goes out and COGFA makes that statement that this is what it costs and that’s what it cost for next year for the school districts.”
Republican Representative C.D. Davidsmeyer said the ERO rate is an effort to ensure those who do take up the option don’t pay more into the retirement system than they have to.
“It basically makes sure that an individual that takes this option,” Davidsmeyer said, “is not paying more into the pension system than the benefit they will receive.”
“The goal here is to make sure that it offsets the cost of the person who is deciding to retire early,” Davidsmeyer said.
Meanwhile Davidsmeyer says there are a couple of options. One option Davidsmeyer says is have the schools go with the proposed rates. Another option the Jacksonville Republican said is determining whether the ERO should even be an option.
“And that’s something that needs to be discussed with school districts in the state, and teachers,” Davidsmeyer said, “to make sure what the benefits of the program are and negatives and positives”.
Nekritz says school districts in the Buffalo Grove area like the option.
“I hear from a lot of my school districts in my area that they really like the ability to make this offer,” Nekrtiz said, “because it gets some of their more expensive teachers off of their payroll.”
Meanwhile the most recent Auditor General report for the Teachers’ Retirement System has the fund at 41.5 percent funded for fiscal year 2015, down 1.5 percent from the year before.