CPS teachers say board shorted pension fund by $32.5 million
BY LISA DONOVAN email@example.com August 31, 2011 6:12PM
Updated: November 4, 2011 7:52PM
Chicago Public Schools have short-changed the teachers’ pension and retirement fund by tens of millions of dollars, a lawsuit claims.
The suit, filed Wednesday by trustees of the pension fund, claims this is the second year in a row the Board of Education hasn’t met its obligations.
But the board claims it has paid enough. A similar lawsuit by the fund was dismissed last year. The two sides can’t even agree on how much the board has contributed to the fund already.
The lawsuit claims the fund received $165.6 million from the district as of June 30, the end of the 2011 fiscal year. But it claims it’s actually owed more than $198 million — which includes $187 million in a state-mandated base payment and required “additional employer contributions” that actuaries for the fund calculate as $11 million.
Pension fund attorney William Leathem told the Sun-Times Thursday the board still owes the fund $32.5 million.
“We made a demand, and [the board of education] said, ‘No, we paid it all,’ ” he said. “Our only option is to go to court.”
But the board claims it owes far less — $154.5 million — and says the state kicked in an additional $32.5 million to meet the $187 million mandated by state law.
“The Board of Education always has met its obligations to the [fund], including the payment made in fiscal year 2011,” CPS spokesman Franklin R. Shuftan wrote in an e-mail. “The fund’s legal theory has no merit and the lawsuit should be dismissed.”
The fund also took the board to court in 2010, accusing officials of shorting the fund by $37 million that year, Leathem said. But the fund lost the case in Cook County Circuit Court. Leathem plans to appeal the decision.
The pension is funded by contributions from the board of education, teacher contributions themselves and any investment returns, Leathem said.