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Legislature Sucks Federal Funding From Needy Schools For Pensions

Schools in Illinois’ neediest districts including Peoria 150 are being forced to spend federal funds to prop up the state’s Teacher Retirement System.  Public schools that serve a significant number of low-income students receive federal Title One grants, earmarked for initiatives to close the achievement gap. If a school uses those funds to hire certified teachers, the school has to pay into that teacher’s retirement account.   

Jessica Handy, government affairs director with Stand for Children Illinois, says this cost Springfield schools more than 1.7 million dollars last year.


As the state’s unfunded pension liability has grown, the rate that schools have to pay has ballooned from 7 percent of the teacher’s salary in 2006 to more than 36 percent. For regular teachers, not paid out of Title 1 money, schools pay less than 1 percent.

The Peoria School District lost more than a million dollars last year to the policy.

The TRS board of directors tried to reduce the federal funds rate, but state lawmakers took charge of setting it.