To answer the question posed in the headline, I don’t think so. And it’s not because your employer is greedy but simply because it would be impossible to pay that amount and stay in business. They would be bankrupt.
But that’s in the private sector where most of us work. In the public sector this is possible because state governments cannot go bankrupt. They just keep raising taxes to pay whatever exorbitant retirement contribution amounts are needed.
The specific case I am talking about involves an employee of the public school system Linda Jedlicka, campus manager of the Lake County High School Tech Campus whose employer pension contribution will be more than $69,000. And the employer is you the taxpayer.
I use Ms. Jedlicka as an example because she was recently written about in the Daily Herald concerning school board member’s complaints about her salary. According to the Daily Herald article her four highest salaries will be $230,675, $257,459, $257,459 and $210,000 from 2008 thru 2011. That means Ms. Jedlicka’s pension will start at over $179,000 per year.
If she retires after 35 years at age 56 then her life expectancy is 30 years and her 30th year’s pension will be $405,000. Her total pension payments will be $7.9 million, the overwhelming majority of it from the Illinois taxpayers. You can see these numbers for yourself by plugging her salaries into our Pension Calculator on the Home Page.
Compare that to the Presidential pensions of Jimmy Carter and George H. W. Bush at $191,000. What exactly did Ms. Jedlicka do for us that rival’s what a president did? Nothing I can think of.
Although the current teacher-pension contribution is 9.4% that has only been for the last 3 years. Before that it was 8.4% and 30 years ago when Ms. Jedlicka started her career it was less than 6%. Compare that with the typical private sector worker contributing 10.5% via 6.5% Social Security and 4% 401K. So although he pays a higher percentage into his retirement what chance do you think that private sector worker has of retiring on $179,000 at age 56?
According to state actuaries, taxpayer liability for state pensions (Teacher, University and State Employees) is in excess of $300 billion over the next 35 years. Also starting in 2010 when Ms Jedlick’s salary is $257,459 the state i.e. taxpayer contributions to her pension will equal about 27% of her salary or over $69,000. How does that compare to your 401K?
And Jedlicka is not alone in her out-of-control salary and pension. In 2006 over 8,470 K-12 employees had salaries over $100,000/yr including 420 phys ed teachers, 94 drivers ed teachers, 71 art teachers, 26 auto repair teachers, 135 music teachers and 4 Latin teachers. Top salary was $170,000 for a Drivers Ed teacher and that does not include the value of the pension, tenure or abbreviated work year.
So the question is: why should the taxpayer have to pay many times more for retirement as an employer than they can reasonably expect as an employee? The answer, of course, is they should not have to pay a premium to fund other people’s pensions. It is not only inherently unfair it is impossible financially over the long term.
Ms. Jedlicka is not even near the top, as total compensation approaches $500,000/yr with taxpayer funded benefits of over $100,000/yr. And because these numbers are based upon 2006 salaries they will certainly be even higher when more current salaries become available.
So let us initiate a “Fairness In Compensation Plan” that will put public sector employee pay and benefits on the same level as their peers in the private sector. That way we will have plenty of money for homeless shelters, food pantries, the CTA and road construction and we can fund all of them without any increase in taxes.
Bill Zettler is a free-lance writer and consultant specializing in public sector compensation.