Here’s how it works (watch the mirrors): The school district keeps paying 7% of current teachers’ salaries into their pension fund, but it won’t make pension payments for new teachers. Instead, it pays new teachers 7% more and bills 7% for their pensions.
It’s not a wash, the city hopes: To make savings happen, the city will create a new incentive for experienced teachers to retire—$1,500 per year of service.
If it hangs together, the deal might reduce total spending on salaries for a couple of years, until raises come in the third and fourth contract years, while increasing long-term spending on pensions. It’s perfect for politicians who think only in the short term.
Neither the school district nor Mayor Rahm Emanuel could provide a cost estimate for the new contract.