SPRINGFIELD, IL – The salaries and retirement benefits of working and retired public school teachers create a $16.1 billion economic stimulus annually in Illinois, according to a study by Teachers’ Retirement System measuring the impact of TRS members across the state.
The study, completed in November of 2018, revealed that salaries paid to active TRS members teaching in schools and pensions and benefits paid to retired members also support 110,600 jobs in every part of Illinois with a combined payroll of $4.7 billion.
“These numbers prove without a doubt the strong impact that teachers have on the economy of Illinois,” said TRS Executive Director Dick Ingram. “Active teacher salaries and the pensions teachers receive in retirement don’t disappear into thin air. These benefits are driven in large part by the investment earnings realized by the System and member and taxpayer contributions.
“The benefits are invested back into communities large and small in all 102 counties. That money finds its way into grocery stores, pharmacies, hardware and department stores and local restaurants; as well as charities and volunteer causes,” he added. “In particular, a TRS pension not only allows many retired teachers to live with safety and dignity in retirement, but allows them to continue to be productive members of their communities.”
In most cases, a TRS pension is the sole retirement income for Illinois educators because they do not qualify for Social Security.
The 2018 TRS Economic Impact Study is the sixth analysis of the System’s benefits completed since 2008. The latest study found that 78 percent of all TRS benefit recipients – 91,694 men, women and children – live in Illinois and receive pensions and benefits totaling $4.4 billion. The study also found that 97 percent of active TRS members, or 154,804, reside in Illinois. Combined, the salaries and benefits paid to TRS members total $11.1 billion.
When these salaries and benefit payments are plugged into economic impact formulas used by the Bureau of Economic Analysis in the U.S. Department of Commerce, the calculations show that the total economic output in Illinois resulting from TRS member salaries and benefits is $16.1 billion -- $9.7 billion from salaries and $6.4 billion from benefit payments.
The formulas also determined that in 2018 TRS members’ salaries and benefits added $9.2 billion to Illinois’ gross domestic product – goods manufactured and services provided. In 2017 Illinois’ total GDP was $832.4 billion. The “added value” of TRS members on the state’s GDP was greater than the combined $7.2 billion contribution of agriculture, fishing and hunting, mining and oil and gas extraction to the economy. By comparison, government added $64.8 billion to the GDP and wholesale and retail trade added $94.8 billion. Leading the pack was finance, insurance and real estate, which added $157.5 billion.
A study by the National Institute on Retirement Security found that the annual economic impact in 2016 of all public pensions paid to retired teachers and state and local government employees in Illinois created a positive economic impact of $28.7 billion and supported 186,327 jobs with a total payroll of $9.6 billion. That year 50,362 retired government workers and teachers received $18.3 billion in retirement benefits from state and local pension systems.
The NIRS study also said pensions paid to retirees in all 50 states generated $1.2 trillion for the economy and supported 7.5 million jobs. In all, $578 billion in pensions were paid that year to 26.9 million retired Americans -- $377.7 billion to government employees at all levels and $200.3 billion to private sector workers.
About Teachers’ Retirement System
The Teachers’ Retirement System of the State of Illinois is the 37th largest pension system in the United States, and provides retirement, disability and survivor benefits to teachers, administrators and other public school personnel employed outside of Chicago. The System serves 417,292 members and had assets of $51.8 billion as of September 30, 2018.