CHICAGO, Sept. 19, 2013 /PRNewswire/ -- The Chicago Teachers' Pension Fund (CTPF) commended the passage of Public Act 098-0427, effective immediately, which protects charter school employees and ensures employers make full pension contributions on their behalf.
The new law (http://www.ilga.gov/legislation/publicacts/98/098-0427.htm) imposes a penalty for late contributions, allows an interest charge on late contributions and requires each charter school to designate a pension officer to certify payroll information and contributions due to the fund.
CTPF receives contributions from approximately 108 CPS charter school employers. CPS teachers do not contribute to or receive social security benefits, and Illinois law requires that all certified personnel participate in CTPF.
"Late last year, CTPF conducted an examination of charter school employers and found a lack of consistent reporting and irregularities," said Jay C. Rehak, president of the CTPF Board of Trustees. "This legislation protects our charter school members and ensures that each employer will make adequate contributions. The law also gives us tools that help collect revenue due to us, such as interest charges and penalties for non-compliance."
CTPF, 99.9 percent funded as recently as 2002, has suffered from chronic underfunding by its primary employer during the last two decades. Diversion of the fund's dedicated tax levy, inadequate employer contributions and Illinois General Assembly-permitted pension funding "holidays" have resulted in a $3.2 billion loss in revenue since 1995. This funding deficit is the primary reason CTPF's funded ratio fell to 53.9 percent in 2012.
"We well understand the damage of underfunding and work proactively to protect our fund. We must make sure that the problems we experience with our primary employer do not spread to other employers," said Rehak. "As fiduciaries of CTPF, we must collect all revenue due to us. This legislation is a critical tool to help us with that duty.
"We would like to thank our Illinois lawmakers who made this possible, State Sens. Antonio Munoz and Martin A. Sandoval and State Rep. Daniel J. Burke."
Established by the Illinois state legislature in 1895, the Chicago Teachers' Pension Fund manages members' assets and administers benefits. The $9.6 billion pension fund serves approximately 59,000 active and retired educators, and provides pension and health insurance benefits to more than 25,000 beneficiaries.
SOURCE Chicago Teachers' Pension Fund (CTPF)