Mundelein, Illinois resident Bill Zettler has spent 35 years designing computer software, analyzing statistics, and giving himself mathematical challenges. Until a few years ago he considered himself a political liberal. Then he spoke with a neighbor, an Illinois school teacher who retired at age 55 and was receiving $9,000 a month in pension benefits.
“I couldn’t believe it,” Zettler said. “So I looked into things.”
What he saw from the Teachers’ Retirement System’s own numbers shocked him.
“There are more than 1,100 retired teachers in Illinois making more than $100,000 a year on their pensions,” Zettler said. “The biggest pension is $325,000 a year. Bill Clinton’s pension is half that.”
$1 Million at Retirement
A self-described “very analytical, very numbers-oriented person,” Zettler recently came up with the following idea: Give teachers $1 million cash when they retire. Let them invest it as they see fit.
“The average teacher in Illinois who retires after 34 years has a pension worth well over a million dollars over their expected lifetime,” Zettler said. “You can go to any mutual fund site and have them calculate an annuity indexed for inflation starting at age 55. If you put $1 million into an annuity at age 55, you can get $40,000 a year back. If we give teachers $1 million up front, over the long term we’ll save taxpayers billions of dollars, and a simple annuity will give them $40,000 a year.”
And, he points out, that doesn’t include any money the person may have saved or invested during his or her years of working.
He doesn’t expect the General Assembly to entertain such a notion, but he said the idea illustrates his point.
“It shows everybody the value of these pensions, which are almost never valued in contract negotiations. How many people have $1 million or more in their 401(k)? I don’t. Most people don’t. But teachers have well over $1 million in their pensions. Many have more than $2 million, and $3 million for administrators is not unusual.”
— Steve Stanek