To reduce its pension costs, Chicago Public Schools announced Wednesday it will end the practice of picking up seven percentage points of the 9% employee contribution for certain existing and future employees.
The pension contribution pickup will be phased out over the next three years, starting this month for “existing central office, regional and non-union support staff,” CPS said in a news release. New hires will not be eligible for the pension contribution pickup.
Beginning with the Aug. 24 pay period, certain existing employees will contribute 4%, saving the cash-strapped school district an estimated $2.9 million for this fiscal year. In fiscal year 2017, which starts June 30, 2016, employees will contribute 6% for a savings of $6.8 million and in fiscal year 2018, employees will contribute the full 9%. The changes, once fully implemented in fiscal year 2018, will save CPS an estimated $11.1 million annually.
“Our goal is to protect classrooms and protect teachers' pensions, which will require everyone pitching in — and we're leading by example today by ending pension pickup for central office staff,” said CPS CEO Forrest Claypool in the news release. “Making pension payments at the expense of our children's classrooms could result in reductions of thousands of teachers and unacceptable class sizes. At the same time, protecting classrooms but shortchanging teachers' pensions isn't fair to the teachers who earned their pensions and deserve them, which is why everyone needs to be part of the solution.”
Principals and assistant principals will not be impacted by the changes, CPS said in the release.
Teachers are not affected by the changes either, but eliminating their pension contribution pickup has been discussed by Chicago Mayor Rahm Emanuel and others.
CPS officials could not immediately be reached for additional information.