{"id":238,"date":"2026-08-01T01:31:06","date_gmt":"2026-08-01T01:31:06","guid":{"rendered":"https:\/\/saveourpension.org\/?p=238"},"modified":"2026-08-01T01:31:06","modified_gmt":"2026-08-01T01:31:06","slug":"cta-two-pension-systems-under-one-name","status":"publish","type":"post","link":"https:\/\/saveourpension.org\/?p=238","title":{"rendered":"CTA: Two Pension Systems Under One Name"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><strong>High Pension Contribution=Higher Turnover=More Accidents and Worse Service<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A pension system succeeds only when everyone plays by the same rules.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Employees contribute a fair share, employers contribute their share, investment earnings grow over time, and retirement benefits are earned through years of service. When every participant operates under the same rules, the system is predictable, sustainable, and fair.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The CTA pension no longer reflects that principle.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Although commonly referred to as a single retirement system, many employees argue that it has effectively operated as <strong>two very different pension systems<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The first is the pension earned by thousands of bus operators, rail operators, mechanics, electricians, laborers, and other frontline employees. These workers spend decades driving buses, repairing trains, maintaining infrastructure, and serving the public. They contribute a significant percentage of every paycheck, work 25 to 35 years, and earn benefits based on long careers under well-defined rules.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The second consists of retirement provisions that, at various times, applied to certain executives, appointed officials, and other participants under different statutory or plan provisions. Those rules allowed some individuals to qualify for benefits under terms that differed substantially from those applicable to the typical frontline employee.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The result is not merely a difference in job titles\u2014it is a difference in financial outcomes.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While the typical CTA employee contributes nearly <strong>15% of every paycheck<\/strong> toward retirement-related obligations and spends decades earning a pension, some participants have received substantially greater lifetime benefits relative to their own contributions because they qualified under different eligibility rules.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">From the perspective of many frontline employees, this creates the appearance of two pension systems operating under one name:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A <strong>blue-collar pension<\/strong>, where retirement benefits are earned through decades of service and increasingly higher employee contributions.<\/li>\n\n\n\n<li>A <strong>white-collar pension<\/strong>, where different eligibility rules historically allowed certain participants to receive significantly greater returns on their own contributions.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">When different groups participate under different rules but draw benefits from the same retirement system, questions about fairness are inevitable.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Those questions become even more significant when today&#8217;s workforce is required to contribute <strong>14.795% of every paycheck<\/strong> to help finance a system that many believe no longer treats every participant equally.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If different classes of employees are subject to fundamentally different retirement rules, then policymakers should ask an equally fundamental question:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Should those groups continue participating in the same retirement system, or should retirement plans reflect the different rules under which benefits are earned?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Illinois has already recognized this principle.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Through Public Acts 94-839 and 95-708, the General Assembly required CTA retiree health care obligations to be separated from the pension system because those obligations represented a distinct category of long-term liability requiring independent funding, governance, and actuarial evaluation. The purpose was greater transparency, improved accountability, and more accurate funding.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The same reasoning applies to retirement liabilities created by special benefit provisions applicable only to a select group.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If one class of participants qualified for benefits under materially different eligibility requirements, contribution expectations, or retirement formulas, those liabilities should be separately identified and funded. Combining those obligations with the traditional pension obscures the true cost of each benefit structure and shifts financial responsibility to employees who never received the enhanced provisions.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"683\" height=\"1024\" src=\"https:\/\/saveourpension.org\/wp-content\/uploads\/2026\/06\/ChatGPT-Image-Jun-30-2026-01_41_10-PM-683x1024.png\" alt=\"\" class=\"wp-image-168\" srcset=\"https:\/\/saveourpension.org\/wp-content\/uploads\/2026\/06\/ChatGPT-Image-Jun-30-2026-01_41_10-PM-683x1024.png 683w, https:\/\/saveourpension.org\/wp-content\/uploads\/2026\/06\/ChatGPT-Image-Jun-30-2026-01_41_10-PM-200x300.png 200w, https:\/\/saveourpension.org\/wp-content\/uploads\/2026\/06\/ChatGPT-Image-Jun-30-2026-01_41_10-PM-768x1152.png 768w, https:\/\/saveourpension.org\/wp-content\/uploads\/2026\/06\/ChatGPT-Image-Jun-30-2026-01_41_10-PM.png 1024w\" sizes=\"auto, (max-width: 683px) 100vw, 683px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Fiduciary Considerations<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Pension trustees owe a fiduciary duty of loyalty to all participants.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">When fiduciaries participate in decisions that directly affect their own retirement benefits, even if authorized by law, those decisions warrant heightened scrutiny because they present an inherent conflict between personal financial interests and fiduciary obligations owed to every participant.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The appearance of conflicted decision-making alone can undermine confidence in the administration of a public retirement system.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For this reason, any liabilities attributable to special retirement provisions benefiting a limited class should be separately identified and independently valued to ensure complete transparency and accountability.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>CTA Pension Board Meeting Notes<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">January 2003<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201c<em>New Business: Mr. Kallianis reminded the Committee of its current lack of fiduciary liability insurance and spoke generally about the type of coverage and the approximate costs when we carried the coverage. He indicated that, in 2003 the Plan&#8217;s coverage was not offered for renewal due to several ongoing lawsuits. Those suits, combined with the accounting scandals that were moving through the private sector, combined to make this type of coverage prohibitively expensive<\/em>.\u201d<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Preservation of Actuarial Integrity<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Actuarial assumptions depend upon predictable and consistently applied rules.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Changing retirement eligibility or benefit structures for only a subset of participants fundamentally alters the assumptions regarding:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>expected years of service,<\/li>\n\n\n\n<li>contribution periods,<\/li>\n\n\n\n<li>retirement age,<\/li>\n\n\n\n<li>benefit duration,<\/li>\n\n\n\n<li>investment funding requirements, and<\/li>\n\n\n\n<li>long-term liabilities.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">When these materially different obligations are merged into one funding pool, the actuarial experience of the traditional pension becomes distorted.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Segregating those liabilities would provide a clearer measurement of the true financial condition of both systems.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Proposed Legislative Remedy<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The Illinois General Assembly should establish two distinct liability classifications.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Uniform Defined Benefit Pension<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This pension would include participants whose retirement benefits are governed by the standard contribution rates of 9% (or average of top 5 public pensions in Illinois), years of service requirements, retirement eligibility, and benefit formulas applicable to the general workforce.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Legacy (White Collar)&nbsp; Enhanced Benefit Liability Trust<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This trust would contain all liabilities attributable to retirement provisions that materially differ from the standard pension structure.<\/p>\n\n\n<figure class=\"wp-block-post-featured-image\"><img loading=\"lazy\" decoding=\"async\" width=\"1316\" height=\"1195\" src=\"https:\/\/saveourpension.org\/wp-content\/uploads\/2026\/08\/111D2ADA-04DE-4726-846A-53189F683604.png\" class=\"attachment-post-thumbnail size-post-thumbnail wp-post-image\" alt=\"\" style=\"object-fit:cover;\" srcset=\"https:\/\/saveourpension.org\/wp-content\/uploads\/2026\/08\/111D2ADA-04DE-4726-846A-53189F683604.png 1316w, https:\/\/saveourpension.org\/wp-content\/uploads\/2026\/08\/111D2ADA-04DE-4726-846A-53189F683604-300x272.png 300w, https:\/\/saveourpension.org\/wp-content\/uploads\/2026\/08\/111D2ADA-04DE-4726-846A-53189F683604-1024x930.png 1024w, https:\/\/saveourpension.org\/wp-content\/uploads\/2026\/08\/111D2ADA-04DE-4726-846A-53189F683604-768x697.png 768w\" sizes=\"auto, (max-width: 1316px) 100vw, 1316px\" \/><\/figure>\n\n\n<p class=\"wp-block-paragraph\">The trust would:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>receive its own actuarial valuation;<\/li>\n\n\n\n<li>maintain independent financial reporting;<\/li>\n\n\n\n<li>identify the full cost of legacy enhanced benefits;<\/li>\n\n\n\n<li>prevent cross-subsidization by participants who were never eligible for those provisions; and<\/li>\n\n\n\n<li>improve transparency for employees, taxpayers, trustees, legislators, and auditors.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Blue Collar CTA Employee<\/strong><\/td><td><strong>Executive\/Political Appointee (under historical rules)<\/strong><\/td><\/tr><tr><td>25\u201335 years of service<\/td><td>8\u201310 years of service<\/td><\/tr><tr><td>~50,000+ hours worked<\/td><td>~monthly board meetings<\/td><\/tr><tr><td>14.795% employee contribution<\/td><td>Lower historical contribution rates (where applicable)<\/td><\/tr><tr><td>Retirement at normal retirement age<\/td><td>Earlier retirement eligibility under historical provisions (where applicable)<\/td><\/tr><tr><td>Approximately <strong>4\u20135\u00d7<\/strong> return on contributions (your calculation)<\/td><td>Significantly higher return under historical examples (e.g., Valerie Jarrett calculation<strong> 100X<\/strong>)<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">If Illinois expects today&#8217;s CTA employees to contribute some of the highest retirement deductions in public transit, then every participant\u2014whether a bus operator or an executive\u2014should earn retirement benefits under the same standards. Anything less undermines confidence in the system, fuels employee turnover, and erodes the trust that every successful pension depends upon.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Keeping the Streets Safe and Reducing Turnover<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Public confidence in a pension system depends upon the perception that every participant is treated under substantially the same rules and that fiduciaries administer the plan solely in the interests of all beneficiaries.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Illinois has already demonstrated through the creation of the Retiree Health Care Trust that separating fundamentally different long-term obligations can improve transparency, funding discipline, and public accountability.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Applying that same principle to pension liabilities created under materially different retirement provisions would not diminish earned benefits. Rather, it would ensure that each category of liability is accurately measured, transparently reported, and funded according to the assumptions under which it was created.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A pension functions most effectively when every participant understands and abides by the same foundational rules. When materially different rules create materially different obligations, those obligations should be separately identified so that the financial integrity of the core retirement system can be preserved for current and future employees.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>High Pension Contribution=Higher Turnover=More Accidents and Worse Service A pension system succeeds only when everyone plays by the same rules. Employees contribute a fair share, employers contribute their share, investment earnings grow over time, and retirement benefits are earned through years of service. When every participant operates under the same rules, the system is predictable, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":239,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-238","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/saveourpension.org\/index.php?rest_route=\/wp\/v2\/posts\/238","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/saveourpension.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/saveourpension.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/saveourpension.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/saveourpension.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=238"}],"version-history":[{"count":2,"href":"https:\/\/saveourpension.org\/index.php?rest_route=\/wp\/v2\/posts\/238\/revisions"}],"predecessor-version":[{"id":241,"href":"https:\/\/saveourpension.org\/index.php?rest_route=\/wp\/v2\/posts\/238\/revisions\/241"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/saveourpension.org\/index.php?rest_route=\/wp\/v2\/media\/239"}],"wp:attachment":[{"href":"https:\/\/saveourpension.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=238"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/saveourpension.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=238"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/saveourpension.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=238"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}