ERIC Number: ED559328
Record Type: Non-Journal
Publication Date: 2015-Apr
Reference Count: 2
Could a Cash Balance Plan Benefit Illinois Public School Teachers?
Johnson, Richard W.; Southgate, Benjamin G.
The Teachers' Retirement System of the State of Illinois is one of the worst-funded public pensions in the nation. In 2013, it held enough assets to cover only 41 percent of its future obligations (Buck Consultants, 2014). This shortfall has led to several reforms, mostly involving benefit cuts that have undermined retirement income security for Illinois teachers and made it more difficult for Illinois school districts to attract and retain qualified teachers. This brief describes the distribution of pensions provided to Illinois teachers under the current plan, and simulates outcomes under a proposed cash balance plan. The authors' previous report "Evaluating Retirement Income Security for Illinois Public School Teachers" (2014) details methods used for the proposed cash balance plan. Results show that 72 percent of Illinois public school teachers hired before 2011--and 56 percent of those with five or more years of completed service--would fare better in the simulated cash balance plan, even though the cash balance plan would be no more costly to taxpayers than the existing plan. [For "Evaluating Retirement Income Security for Illinois Public School Teachers" (2014), see ED559321.]
Descriptors: Teacher Retirement, Retirement Benefits, Public School Teachers, Retrenchment, Compensation (Remuneration), Simulation, Educational Equity (Finance)
Urban Institute. 2100 M Street NW, Washington, DC 20037. Tel: 202-261-5687; Fax: 202-467-5775; Web site: http://www.urban.org
Publication Type: Reports - Evaluative
Education Level: N/A
Sponsor: Laura and John Arnold Foundation
Authoring Institution: Urban Institute
Identifiers - Location: Illinois