Chicago Public School Teachers Sue Charter School Operator Over Missing Pensions

Approximately 50% of the public school workforce is made up of teachers, many of whom are likely underpaid for the work they do. In Chicago public schools, a number of teachers were allegedly further underpaid by a charter school operator who did not report their employment and subsequently failed to pay pension contributions on their behalf. And now, the Chicago Public School Teacher’ Pension and Retirement Fund is fighting back by suing that operator, Prologue Inc.

In Chicago, licensed teachers do not participate in Social Security. The state pension code instead requires 9% of their salary to be put towards pension funding. In Prologue’s case, the operator agreed to pay 6.2% of this contribution and have employees pay the remaining 2.8% towards their pensions. But Prologue violated the state’s pension code by failing to report licensed teacher employment and employee contributions deducted from those teachers’ salaries. They also failed to pay its agreed upon 6.2% contribution. All told, an audit found that between 2013 and 2016, there was upwards of $130,000 in unpaid pension contributions and $1.4 million in underreported wages. The operator reported only six licensed employees in 2014, and in 2015 and 2016, they reported zero — despite the fact they had anywhere from 14 to 17 licensed teachers in their employ during that period. A lawsuit has been filed against Prologue for failing to report this information and failing to pay the pension money owed.

Jay C. Rehak, president of Chicago Public School Teacher’ Pension and Retirement Fund’s board of trustees, said in a release: “This is an egregious example of an employer taking advantage of its employees. This wasn’t just sloppy bookkeeping. This was fraud. The employer collected contributions from teachers, but did not turn over all of those contributions to the (CTPF). They also concealed teachers who were entitled to pension benefits. These unconscionable actions allowed Prologue’s leaders to take advantage of our members.”

Prologue used to operate the now-closed Joshua Johnston Charter School for Fine Art and Design, but their agreement was rescinded by the Chicago Board of Education in August of 2016. The BOE filed its own lawsuit against Prologue in March of 2017 that alleged breach of contract. In states like Texas, breach of contract claims must be filed within two to four years (depending on the contract), but the statute of limitations in Illinois is anywhere from five to 10 years. The Board of Education demanded financial accountability from Prologue after the operator refused to provide information and financial records.

But not even teachers are immune from trying to game the system. Some retired Illinois educators are able to take home pensions in the six figures due to illegal activity and technical loopholes. Some have even calculated unused sick and vacation days or more recent raises in salary to raise their pension payouts. These incidents show that there are educators at completely opposite ends of the spectrum, and according to many, the system is “irreparably broken.”