* Bill Brady says the pension reform conference committee is still a ways from completing its work…
A partisan split is developing as Republicans — three of whom are running for higher office next year — are demanding more information on additional cost-cutting measures they’re seeking, which could take weeks.
“We know the Democrats can’t pass this on their own,” said Republican Sen. Bill Brady. “Unfortunately I don’t see anything happening legislatively for at least four weeks at the earliest.”
The AP’s story is pretty doom and gloom about the prospects for getting a deal done.
* I’m told, however, that the committee members are asking the legislative leaders to set some parameters so that the negotiations can be better defined.
And if you read between the lines, it’s not a one hundred percent no-go. For instance, buried at the bottom is this…
[Sen. Matt Murphy], a deputy Republican leader, called the latest plan “back-loaded in its current form” because it relies on future lawmakers keeping promises. But he declined to say outright whether he would vote for it or not.
“Past general assemblies’ unwillingness to do that is exactly what got us here in the first place,” Murphy said. “We only get one bite at this apple.”
The AP could’ve just as easily put Murphy’s quote at the top instead of burying it at the bottom to illustrate how it ain’t over ’til it’s over.
*** UPDATE *** WLS has more on a possible solution…
[ *** End Of Update *** ]
Republicans on the conference committee apparently want more savings. State Rep. Mike Zalewski of Chicago – a Democrat on the committee – says the Republicans are not making unreasonable requests.
“To maybe bring the savings number up just a little bit with respect to the cost of living, things like that, maybe an alternative to a defined contribution plan for teachers that don’t want to stay in the system their whole careers,” Zalewski said.
* Meanwhile, this is a pretty bold statement by Bruce Rauner…
He favors capping pensions that have already been earned and moving government employees to a defined benefit, 401(k)-type of retirement plan.
“It’s what’s fair and affordable,” Rauner said. “Every dollar of excess pension … is a dollar that can’t go into other things.”
Making such a change would cut the state’s liability from $100 billion to $50 billion, according to Rauner.
None of the other plans, even Speaker Madigan’s harshest proposal, comes anywhere near to cutting the unfunded liability in half. Madigan’s plan would’ve “only” cut $21 billion from the unfunded liability.
I’ve asked for an explanation and will let you know what the Rauner campaign says.
*** UPDATE *** Thanks to a commenter, the Rauner plan appears to be based on HB 3303. From the synopsis…
Amends the Illinois Pension Code. With respect to the 5 State-funded retirement systems: Provides a new funding formula for State contributions, with a 100% funding goal and amortization calculated on a level dollar amount.
Provides that no additional service credit may be accrued and no automatic increase in a retirement annuity shall be received. Provides that the pensionable salary of an active participant may not exceed that individual’s pensionable salary as of the effective date.
Provides that State-funded retirement systems shall establish self-directed retirement plans for all active participants and all employees hired on or after the effective date. Provides that all active participants shall have the option of participating in a self-directed retirement plan. Provides that these changes are controlling over any other law. Effective immediately.
* COGFA studied the impact on one system, TRS…
The Commission’s actuary performed a cost study on a proposal that is substantially similar to HB 3303. That cost study showed a long-term reduction in State contributions for TRS only (through FY 2045) of $71.4 billion, and a reduction in FY 2014 unfunded liability of $27.4 billion. However, this cost study assumed no deviation from the current statutory funding target of amassing assets that are equal to 90% of DB liabilities by FY 2045. HB 3303 changes this target to 100% by FY 2045, and it specifies a level-dollar amortization approach. These two changes would result in greater long-term savings than those previously mentioned; however, an updated actuarial study would be required to capture the precise savings associated with the funding changes.
However, the bill has just three co-sponsors, and all three (Morrison, Ives, Wheeler) are probably the furthest to the right of any House member. It ain’t exactly a popular idea.
[ *** End Of Update *** ]
* In other news…
As he runs for re-election, Gov. Pat Quinn is staking a lot on getting something done with pensions. He’s making a show of asking the state Supreme Court let him cancel legislators’ salaries until it’s done, and he says he won’t deal with other major issues before the General Assembly — like using tax credits to keep ADM headquartered in Illinois — until there’s what he calls a “comprehensive pension solution.”
But it’s hard to tell just what that means.
Most of the ten legislators he tasked with crafting that solution don’t even seem to know. They say he’s been largely absent … until this month. Amanda Vinicky checked in with the ten representatives and senators on a special pension committee to see how involved the governor has been as they negotiate a pension deal.
Go read the whole thing.