BGA Investigation: Community College Pensions 'Run Amok'
CHICAGO (CBS) -- They've been called the poster children for a system run amok. The Better Government Association has found retired community college teachers bringing in six-figure retirement checks – earning far more state money in retirement than they did on the job.
CBS 2 Chief Correspondent Jay Levine has more on the names and numbers.
John Swalec, former President Waubonsee Community college, collected $1.9 million in 10 years of retirement after contributing just $146,000.
George Jorndt, former Triton College President, got $1.8 million in 10 years of retirement. His total contribution was $180,000.
Peter Remus, retired math chair at the Chicago City Colleges, collected $581,000 in three years. He contributed $183,000.
"This is a great example of a system run amok," BGA Executive Director Andy Shaw said. Retirees now get 80% of their final salary after 34 years and yearly 3% cost of living increases – all free from state tax.
College of DuPage President Bob Breuder could have been eligible for a huge state pension, but he opted for a 401(k) instead.
"I can sit off on the side and look what's happening and be, frankly, dismayed at what I see happening in this state.
In two years at DuPage, he has doubled the reserve to over $100 million, while embarking on an ambitious building program -- in part by taking a tough stance on employee benefits. He feels the state lawmakers should do the same thing.
"We have a bill and I can assure you that the opposition – from the groups, from state employees and the university employees – is huge," said Illinois House Republican Leader Tom Cross (R-Oswego) "But what you have to say to those folks is, if you do nothing, there may not be a system down the road."
From thousands of pages of state records the BGA obtained through a request under the Freedom of Information Act, it found more than 1,400 retirees who collected more than $500,000 each. And nearly 500 of them collected more than $100,000 a year.
"It's a great job. You could pay them half as much and have people standing in line for those jobs," said pension consultant Bill Zettler.
He said that the average 66-year-old private sector retiree collects $28,000 a year in Social Security. A 66-year-old community college retiree collects $128,000 a year, plus those cost of living increases.
"You can get rid of that 3 percent. That's a lot of money," he said. "Throughout the system, that would cost about $250 million a year."
Shaw said that, "One school of thought says you can't change any benefits for current employees," citing a provision in the Illinois Constitution that says government employee pensions in Illinois are contractual obligations "the benefits of which shall not be diminished or impaired."
But Shaw said another school of thought says "Try it and test in court. The Better Government Association says let's reform pensions and then take it to court if necessary."
No one is suggesting cutting current state retirees' pensions or take away benefits people have already earned – only that we can no longer afford the generosity of the past and that unless we scale way back on future benefits, there may eventually be no money for anyone.
You can read the entire Better Government Association report on pensions in the Thursday morning Chicago Sun-Times.
CBS 2 Political Producer Ed Marshall contributed to this report.
