The pension spike survives (Chicago Tribune)

January 2, 2013 – Seven years ago, Illinois lawmakers tried to curb the practice of “pension spiking” by school districts. Local districts would award huge pay hikes in the final years of a teacher’s or administrator’s career, which boosted his pension payout. The school district had to pay only for the short-term spike in pay, but the state pension fund was on the hook for years, even decades, of higher pension payments based on salary. Local school boards got to play Santa Claus and send the bill to Springfield. In 2005, lawmakers capped the pension fund exposure to this scam. The pension impact of any annual pay hike above 6 percent in the last four years of an educator’s employment would have to be covered by the local school district.

Link to Full Article: http://www.chicagotribune.com/news/opinion/editorials/ct-edit-spike-20130102,0,7064187.story

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