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Finalized pension reform bill released

Monday, Dec 2, 2013

* Click here for the “final” version of the conference committee report.

- Posted by Rich Miller        


91 Comments
  1. - Formerly Known As... - Monday, Dec 2, 13 @ 12:35 pm:

    They manage to deliver the official, “final” version roughly than 24 hours before the vote?

    “We have to pass this bill so you can find out what’s in it.”

    Yeah, ’cause that’s worked out so well in the past when dealing with major reforms at the state or national level.


  2. - Sir Reel - Monday, Dec 2, 13 @ 12:43 pm:

    As an already retired State employee, what’s the “consideration” for me in this bill? Too late to reduce my pension contribution by 1%.


  3. - Anon - Monday, Dec 2, 13 @ 12:44 pm:

    No snark question: How does capping salary for pension benefits at $107K not impair the pension of those making more than that? (aka Judges)?


  4. - second street - Monday, Dec 2, 13 @ 12:46 pm:

    The change from 3% cola on 100% of a retiree’s pension to 1/2 of the inflation rate on part of the pension ($1000 for each year worked) will be huge.


  5. - Rusty618 - Monday, Dec 2, 13 @ 12:47 pm:

    I would guess that many of our state senators and representatives look at this site. I hope they realize that retirees, state employees, teachers and university employees are watching very closely how they vote on this bill, and they will be voting accordingly next year in the primary and general elections. It could be a very deep hole to dig out of!


  6. - John on the spot - Monday, Dec 2, 13 @ 12:50 pm:

    To Sir reel

    -As an already retired State employee, what’s the “consideration” for me in this bill? Too late to reduce my pension contribution by 1%.

    What if the IL Supreme Court strikes this part down– ie that there is no consideration for retirees–and reinstates the compounded COLA?

    Wouldn’t the net affect of that decision be Cullerton’s original SB 1? Is this intentional?


  7. - facts are stubborn things - Monday, Dec 2, 13 @ 12:55 pm:

    As I read the bill, a person will receive the lessor of the following. $1000 times the years of service or their current pension. If their current pension is less then the above formula then they will receive the 3% compounded COLA each year until their pension reaches the above formula of years of servie times $1000. Lets say you have 30 years of service and have a $50,000 current pension. You will then work from the $30,000 figure which becomes the base at which your annual 3% increase will be baed on. The CPI each year will be added to that base figure and then that new figure will be taken times 3% to acheive your new annual COLA. If you have a $30,000 pension now and inflation runs at 3% each year then ther would be no change. If you have a larger pension then $30,000 ( in this example ) or if inflation runs at less then 3% then you will have a diminishment of your pension.


  8. - facts are stubborn things - Monday, Dec 2, 13 @ 1:00 pm:

    In one news story the formula was $800 times years of service if your had Social security. I did not see that figure in the bill? Seemed to be a strait $1000 times years of service to establish baseline pension for purposes of figuring yearly COLA based on that amount increasing by the CPI and then taken times 3%


  9. - huh - Monday, Dec 2, 13 @ 1:02 pm:

    ==As I read the bill, a person will receive the lessor of the following. $1000 times the years of service or their current pension.==

    Not correct. The change is to the cola, not the regular annuity. The $1000 times years of service is how you calculate the cola. I will get my regular annuity - no changes to that calculation - but the colas will be different.


  10. - spidad60 - Monday, Dec 2, 13 @ 1:14 pm:

    It makes no sense to me that current employees pay less. It is obviously the clear intention of the politicians to diminish the earned pension benefits of career employees. If successful, the employees will need to invest in something to makeup that reduction. Why not increase employee contributions to the pension system? I haven’t talked to any employee that objects to increased contributions, as long as it is to make up for market fluctuation and not politically motivated skipped payments. Actuaries can do that math, and I’m sure they have a dollar figure.


  11. - Walter Mitty - Monday, Dec 2, 13 @ 1:28 pm:

    As someone who has 20 years in the system…I really applaud something… If a guy like me that will have time to earn still… I can at least plan. I never earned the highest degree one can reach for the retirement. If this drags on and they don’t do something for the current retirees and ones close….Well, it doesn’t help me either. Guys like me need to feel the pain… I didn’t make this mess, and I am not happy I have to clean it up. But life ain’t fair.. Time to start ripping the band aid off. Also, it would be a great start if they take their pensions away as lawmakers. I don’t think politician was a major in college. Serve… Then go back to work.


  12. - East Central Illinois - Monday, Dec 2, 13 @ 1:29 pm:

    There is no “consideration” at all in this bill for those that are retired as of right now; nor any “consideration” for those that are very close to retiring. I had heard that retirees and those close to retiring might be “grandfathered” in . . . but I see nothing in writing to that point.
    The people that work in public positions are being made the scapegoat in this whole debacle. They didn’t get Illinois into this position, rather the elected officials over a number of years have done this.


  13. - RNUG - Monday, Dec 2, 13 @ 1:42 pm:

    I’m not positive about some of the provisions because my document word search tool is acting really weird with this document. I did manually scan through the bill for changes.

    This bill is DIFFERENT from the draft I read last night. Among other things, it grew 2 pages longer. This version will have more money going out of the pension funds (higher SERS COLA calculaion) and less money coming in (supplemental money disappeared). So which bill got scored by COGFA, the draft from last night or theis newer bill?

    The $800/$1,000 in the COLA calculation seems to have become $1,000 for everyone.

    The supplemental monies from the pension bonds being paid off seem to have disappeared into thin air. Same for listing the fixed $1B payment on top of the required annual payments.

    Some of the little language quirks and nuances I found seem to have disappeared, except for the one slightly goosing the, I think, GARS AAI when the first COLA occurs after more than 12 months.

    I’m sure there is other stuff I missed …


  14. - Andrew Szakmary - Monday, Dec 2, 13 @ 1:42 pm:

    I have read most of the SURS portion of the bill. beyond the huge cuts to the 3% AAI, this bill contains flat-out unspeakable cuts to the pensions of Tier 1 SURS employees who are, say, 10-15 years away from retirement, via changes to the money purchase formula. Instead of having their contribution balances compound at the investment returns that SURS actually earns (predicted to be 7.75% per year), they will grow at the 30-year T-Bond rate + 75 bp, currently around 4.50%. Moreover, the pension annuity will be figured using this new lower rate as well. For a 60-year old who is retiring, this would mean a pension that is at least 25% lower under the rule 2 money purchase formula starting June 2014, and for every year retirement is delayed beyond that point a further 3.25% reduction - on top of the COLA reductions that will hit everyone. The only saving grace is that there is a clause stating that the rule 2 pension cannot be less than if the person retired prior to June 1, 2014. But I don’t know how to interpret this for someone who is not yet eligible to retire before then, but will be several years later.

    Certainly in the longer term, what the legislation does is basically do away with the money purchase formula in SURS, which results in the biggest benefit now for the overwhelming majority of members. This will particularly impact folks who worked under SURS for only part of their careers, and are classified as inactive for many years before they are eligible to retire. I think, in most cases, such individuals will have more than 50% of their pensions taken away.


  15. - Snucka - Monday, Dec 2, 13 @ 1:43 pm:

    I keep reading that there are “many other/legal/constitutional options for fixing the pension issue”. Still waiting for someone to elaborate.


  16. - RNUG - Monday, Dec 2, 13 @ 1:46 pm:

    Snucka @ 1:43 pm:

    The simplest, most obvious and legal (plus moral & ethical) fix is to just pay back what was diverted from the pension funds. That will require new revenue (taxes) which the GA does not have the intestional fortitude to impose.


  17. - RNUG - Monday, Dec 2, 13 @ 1:49 pm:

    Snucka @ 1:43 pm:

    There have been numerous discussions here of valid contract law changes that could be offered on a voluntary basis and a lot of different ideas on increasing revenue. If you want to know the details, I suggest you re-read the last three years of the Cap Fax blog.


  18. - facts are stubborn things - Monday, Dec 2, 13 @ 1:49 pm:

    @RNUG - Monday, Dec 2, 13 @ 1:42 pm:

    =The $800/$1,000 in the COLA calculation seems to have become $1,000 for everyone.=

    That is how it read to me as well. Thank you for confirming. I kept reading reports that the amount would depend on wheather you were blended with SS but could not find in the bill.


  19. - Demoralized - Monday, Dec 2, 13 @ 1:50 pm:

    ==Why not increase employee contributions to the pension system?==

    Why would I increase my contribution to get something less than I was originally promised? I might agree to increase it if I could keep what I have but I’m not paying more to get something less.


  20. - RNUG - Monday, Dec 2, 13 @ 1:50 pm:

    I’m going to take a mental health break now. I’ll try to read and analyze some more of this tonight.


  21. - Formerly Known As... - Monday, Dec 2, 13 @ 1:51 pm:

    @Snucka - under current law, pensions will be funded at 90% by 2045.

    This plan claims it will fund them at 100% by 2044.

    One of the “many other legal/constitutional options for fixing this pension issue” would be exactly what Illinois is currently doing.


  22. - facts are stubborn things - Monday, Dec 2, 13 @ 1:54 pm:

    I beleive to give consideration to those already retired who have pensions above the formula base amount, 3% simple interest shold be paid on the pension amount above the base line amount. That would be giving up 3% compounded COLA on entire pension for inflation protection on the base amount and then keep a 3% COLA but in simple terms on the balance. Don’t get me wrong, I think a promise is a promise and the pensions sould be paid as earned. I am trying to improve the existing bill by offering a suggestion to build into it some form of consideration for those with larger pensions. As currently written there is no consideration for those who have pensions above the $1000 times years of service formula.


  23. - UIC guy - Monday, Dec 2, 13 @ 2:00 pm:

    Implementation Date: does the act say anything about when it would be implemented, contingent upon its being contested in the courts?

    I seem to remember another bill, a year or so ago, which said that if the act was litigated then it would take effect a certain period after a definitive ruling had been made. Is there anything similar in this bill? I’ve skimmed bits of it but didn’t see anything to the point.


  24. - Retired and Fed Up - Monday, Dec 2, 13 @ 2:03 pm:

    The $800 is still there for SERS members who also pay in to Social Security.


  25. - Marty - Monday, Dec 2, 13 @ 2:11 pm:

    The $800 is referenced on pages 131 and 136, the SERS portion.


  26. - RNUG - Monday, Dec 2, 13 @ 2:13 pm:

    Retired and Fed Up @ 2:03 pm:

    I must have missed it. I had to look at it online since it came up corrupted every time I saved it. What page is that on?


  27. - RNUG - Monday, Dec 2, 13 @ 2:13 pm:

    Thanks Marty.


  28. - UIC guy - Monday, Dec 2, 13 @ 2:18 pm:

    @ Andrew Szakmary: Thanks for spotting this. After I read your comment I found the parenthetical comment at the top of p. 189 about using the 30-year T-Bond rate plus 0.75% for determining the annuity, given the amount nominally accrued. (I.e. not merely for determining the accrued amount.)

    That’s a HUGE hit for a lot of SURS members, as you say (and it’s hidden away in a parenthetical comment). I suppose the only way around it is to time one’s retirement for a period when the 30-year T-Bond is high. (That may not happen soon enough for me, but the drafters of the bill may be foolish if they think it’s never going to happen. Of course if this bill is upheld by the ISC then I suppose another even less favorable bill can be passed any time the political forces line up.)


  29. - Stones - Monday, Dec 2, 13 @ 2:28 pm:

    Any changes to the Rule of 85?


  30. - second street - Monday, Dec 2, 13 @ 2:33 pm:

    Hard to read a 300 plus page document with 89 sentences beginning with “Notwithstanding” (some other provision).


  31. - RNUG - Monday, Dec 2, 13 @ 2:35 pm:

    Now I’m seeing the stuff that was showing up missing for me earlier, like the supplemental payments and the $1B fixed payments, and the $800/$1,000 amount for SERS. Weird … must be having some kind of computer software or browser problem.

    Ignore my earlier posting. Looks like I’m going to have to switch computers and try it again.


  32. - Ghost - Monday, Dec 2, 13 @ 2:51 pm:

    Does this apply to the judges?


  33. - downstate hack - Monday, Dec 2, 13 @ 2:55 pm:

    Reducing current employees contributions makes absolutely no sense when this Bill does not fully solve the problem.


  34. - Ghost - Monday, Dec 2, 13 @ 3:02 pm:

    downstate the press has been kind of missing the big picture on the reduction, and the GA is donwplaying it, IMHO, bvecuase its a giant problem in theri legal case. Under the current pension law, employees contribute 1% towards the cola they are trying to remove. That means employees have been paying for the COLA. So they promised to provide the cola, and collected paymeent for it alread. I am not sure how they get around that this benefit has vested and been paid for to allow its removal.

    The 1% reduction is the actual removal of the employees contribution to the cola they are markedly reducing/changing. They have to. They cant change the cola but mandate the employees continue paying for it. So they are getting rid of the employees paying fro the benfit and then changing it.

    The problem is employees have already paid for it, and they do not offer any consideration for what has already been paid for and vested. Butin any event they cant take it away and demand continued payment.


  35. - facts are stubborn things - Monday, Dec 2, 13 @ 3:06 pm:

    huh - Monday, Dec 2, 13 @ 1:02 pm:

    THanks,yes I realized that I should not have assumed that it was taken for granted. In reading my post again I should have made it clear the formula was just for the COLA and not the new pension amount.

    Thanks


  36. - facts are stubborn things - Monday, Dec 2, 13 @ 3:07 pm:

    @- Retired and Fed Up - Monday, Dec 2, 13 @ 2:03 pm:

    =The $800 is still there for SERS members who also pay in to Social Security=

    Thanks, I missed it. Even worse for those with pensions above the formula base amount.


  37. - archimedes - Monday, Dec 2, 13 @ 3:12 pm:

    There are three considerations in this law that the State will argue are valid and sufficient to make it survive Section 15 of the Illinois constitution:

    1. The reduction of 1% contribution for current employees.

    2. The payment guarantee for all employees and retirees.

    3. The Defined Contribution Option for current Tier 1 employees.

    The payment guarantee essentially says the pension systems can petition the Supreme Court to compel payment. The State waives sovereign immunity for this cause (so they have to defend their action). However, the State can avoid this by amending this Pension Reform bill to change the payment. This is what has been done with the old 1995 Pension Ramp bill - pension holidays were granted by amending the bill.

    The difference here, is that the action must be taken prior to “not paying.” And, should the bill not be amended, the payment can be compelled by the court.


  38. - Stones - Monday, Dec 2, 13 @ 3:19 pm:

    Rule of 85 still intact - just found it on pg 99.


  39. - RNUG - Monday, Dec 2, 13 @ 4:02 pm:

    archimedes @ 3:12 pm:

    All that language does is grant a State creted entity the right to sue / compel the State to pay. Under contract law as I understand it, each and every member to the contract (in other words, EVRY retiree) has to have a right to accept or reject it or exercise it. NOWHERE in the language I have read does any retiree get granted a right to sue the State over the pension funding.


  40. - D.P.Gumby - Monday, Dec 2, 13 @ 4:07 pm:

    For a retiree, I don’t think payment guarantee constitutes contract consideration in that the GA can change that any time…like they have been doing for years. Regardless of sovereign immunity, there is still separation of power issues w/ the Court ordering the GA to pay. That issue was part of the law suit about Gov’s veto of salary increase for legislators.


  41. - Arthur Andersen - Monday, Dec 2, 13 @ 4:08 pm:

    That DC option is lousy, even as DC options go. The State is only required to put in 3% of pay, although there is some fancy preceding language about matching normal cost. The DC service credits would also be clearly excluded from survivor benefit calculations.

    Ghost, I noticed that bit of draftsmanship on the COLA contributions as well.

    Andrew, the money purchase formula for SURS has been a deal available only to SURS (TRS lost theirs in 2006 and was never as lucrative.) I don’t like any of these cuts, but that particular one is “low hanging fruit” if you will, that many observers are surprised has lasted this long. Moving the interest rate determination over to the Comptroller was a warning shot that apparently went unheeded.


  42. - archimedes - Monday, Dec 2, 13 @ 4:22 pm:

    RNUG - I agree with you. Only the pension systems (ex. TRS, SURS, etc.) can compel/sue the State to pay - not the individual pension member. And the constitution says that “membership” in the pension system is an enforceable contractual relationship.

    I don’t think the “guarantee” constitutes consideration to give up 25% of my pension. And I don’t receive the guarantee - TRS does.


  43. - RNUG - Monday, Dec 2, 13 @ 4:48 pm:

    Finally managed to download a clean copy of the “final” version on a different computer. Now that I have a complete non-corrupted copy, it looks pretty much like last night’s draft.

    Haven’t finished cross-referencing all the citations in the section that identifies which provisions are non-severable but I have established that the AAI change, the funding guarantee and the bond prioritization are all tied together and can not be severed.


  44. - ergo sum - Monday, Dec 2, 13 @ 4:58 pm:

    What’s that Homeland Security phone number
    to report suspected domestic terrorism?


  45. - RNUG - Monday, Dec 2, 13 @ 5:07 pm:

    Reading the draft last night and re-reading the final today, I wonder how many employees will pull the pin and retire in the next couple of weeks so they can beat the effective date (I’m assuming it will not get a super majority to be effective immediately) and also beat the end of year deadline to avoid missing a year’s COLA under the current rules? If that happens, it could be an even uglier brain drian than 2002.


  46. - RNUG - Monday, Dec 2, 13 @ 5:08 pm:

    LOL … just after I posted the note above, I heard a report on WICS speculating on immediate retirements.


  47. - Andrew Szakmary - Monday, Dec 2, 13 @ 5:28 pm:

    Arthur Anderson:

    When they moved the determination of the effective interest rate (ERI) in SURS to the Comptroller (but not the prescribed rate to do annuity calculations), the stipulation was that the Comptroller was supposed to use the same factors to determine the ERI as the SURS Board. Since 2005, cumulatively, the ERI set be the Comptroller has been 3.25% less than set by the Board, so that 2005 legislation has reduced my pension by 3.25%. I am not happy about that, but it is not enough for me to file a lawsuit.

    But what they are now proposing goes many orders of magnitude beyond that. It won’t affect me because I just retired, but the cuts to the ERI and the prescribed rate of interest could easily cost someone 10 years from retirement 50% of their pension.

    I vehemently disagree that the money purchase formula in SURS is a sweet deal. As a Finance professor I am rather proficient with time value of money calculations. I have run the numbers, and to provide me the present value of my benefits under current law, the State would have had to contribute 6.2% per year up to the SS maximum wage each year, plus 9.8% of my entire salary each year, to SURS. That, combined with actual SURS investment returns is what it would have taken. The private university where I currently work pays 6.2% SS plus 10% of salary into my defined-contribution 403b plan, and that arrangement is fairly standard at private universities nationwide. Oh, and the money in my 403b is (presumably) mine, and the politicians can’t get their grubby hands on it. Sure, there is investment risk, but I would much rather deal with that than the extreme political risk in Illinois.


  48. - Jan Brueckner - Monday, Dec 2, 13 @ 5:35 pm:

    What the proposed plan means is that everyone with the same years of service, regardless of the size of their pension, gets the same COLA amount. For example, everyone with 30 years of service gets $30 times 30 years, or $900. This plan is OK for people with smaller pensions (say $35,000), but it’s killer for those with larger pensions. For such people, it’s a real insult—giving what might be far less than a 1% increase per year. Is the legislature saying that the services of these higher-paid people to the state weren’t worth anything, allowing them to be denigrated in this fashion?


  49. - Anonymous - Monday, Dec 2, 13 @ 5:37 pm:

    What does the bills say in regards to retroactive COLA for retirees that they should receive in January after their 61st birthday. I am 60. Will I lose all of that retroactive COLA


  50. - Anonymous - Monday, Dec 2, 13 @ 5:45 pm:

    I too would like to know the status of early retirement retroactive COLA. Was this already earned?? Nobody ever seems to have any idea. Now that the bill is out, what are the implications? This is a big deal for me.


  51. - Nearly Normal - Monday, Dec 2, 13 @ 6:08 pm:

    Brady has signed off on the bill– SPRINGFIELD, Ill. (AP) — A Republican state Senator and gubernatorial hopeful was the first of a ten-member bipartisan committee to sign a report approving a plan to deal with Illinois’ $100 billion pension problem.

    Bill Brady of Bloomington says he expects at least eight of ten pension committee members to sign the plan. It’s estimated to save the state $160 billion over 30 years. By law, it needs at least six signatures for state House and Senate consideration.

    Brady says the Legislature has thoroughly debated all the plan’s components in recent years. He is the only one of four Republican gubernatorial candidates to support it.

    The committee will meet Tuesday morning to discuss the proposal. The House and Senate are expected to consider it later in the day.


  52. - aunt_petunia - Monday, Dec 2, 13 @ 6:19 pm:

    The exodus of public employees begins in three… two… one….


  53. - brokeinIL - Monday, Dec 2, 13 @ 6:51 pm:

    Get the democrats out of office they have bankrupt the state.


  54. - Newguy - Monday, Dec 2, 13 @ 6:53 pm:

    A mass exodus of public employees may not be such a bad thing and is most likely part of a hidden agenda. The last AFSCME contract signed and ratified in July lowered the starting salaries by 3 steps with the implementation of Steps 1c, 1b, and 1a for employees hired after July 1, 2013. However, in order to benefit from the payroll reductions the State needs to create vacancies by suggesting it may be in some employees best interest to retire, soon.


  55. - Oregon Expat - Monday, Dec 2, 13 @ 7:04 pm:

    I am a 73 year-old widow whose late husband, self-employed, put in maximum to Social Security for himself and his secretaries for forty years. Because of the pension offset, I get less than $200 a month from what would have been a $1500 monthly Social Security payment. My pension based on 24.5 years service is about $24,000. The way I read the bill, I think my COLA will be figured on the $800 amount. By the way, Oregon taxes my pension at 9% while Social Security is not subject to state taxes. My penalty, I guess, for living in this beautiful state.


  56. - capper - Monday, Dec 2, 13 @ 7:22 pm:

    OK…if i am a teacher who is about 10 years from retiring, and I make more than $110,000…how does this affect me? Am I right that my salary, and all future salary increases are grandfathered in? So, if I retire in 10 years with a salary above the cap, is my pension based on my last year employment?


  57. - What It Is! - Monday, Dec 2, 13 @ 7:39 pm:

    - capper - Monday, Dec 2, 13 @ 7:22 pm:

    Your annuity is calculated as the average of your highest 4 years of pay, presumably the last 4 years. The question at hand is whether or not the $109k amount cited in the language is the new cap. Tier II employees are already capped. IF my read is correct, current employees are grandfathered in. Stay tuned, though.


  58. - capper - Monday, Dec 2, 13 @ 7:49 pm:

    Just found this on NIU website…watch out!

    Pensionable Earnings Limitation - All future salary increases would be excluded from the
    calculation of pension benefits for those earning more than the Tier 2 Wage Base (2011 Social
    Security wage base adjusted by ½ CPI). Tier 1
    Participants with earnings exceeding the Tier 2
    Wage Base as of the effective date would have pensionable earnings frozen and limited to the
    participant’s rate of earnings as of the effective date of the legislation.


  59. - Anonymous - Monday, Dec 2, 13 @ 8:00 pm:

    Capper, if I read the bill correctly only current contracts are grandfathered in. So, if your current contract expires in 2015, those raises are grandfathered. New contracts are not guaranteed. So, basically, any raise you RECEIVE in your CURRENT contract is protected. Thats it.


  60. - What It Is! - Monday, Dec 2, 13 @ 8:07 pm:

    Just spoke to a friend in IFT leadership and that read by Anonymous is correct. Time to renegotiate REALLY long contracts ASAP. I’ve got 8 years left so it’s time to think. Education Administrators? Ouch. Sorry about that . . .


  61. - capper - Monday, Dec 2, 13 @ 8:14 pm:

    OK..it is settled then. You are frozen in salary whenever your current contract runs out…unbelievable..again, am i right to assume that i will not have to pay trs on any amount above my frozen salary?


  62. - capper - Monday, Dec 2, 13 @ 8:17 pm:

    One more question…how does extending your retirement for 4 months (i am 45) work? Do I leave the classroom 4 months after the school year starts, the year I am retiring?


  63. - What Next - Monday, Dec 2, 13 @ 9:34 pm:

    My 25 years into social security has been reduced to $146/mo because I receive about 25K/yr from SURS for 21 years. Now they want to reduce that?
    I’m 65 and it’s too late for me to change much about my working future, eh? I worked hard, followed the rules and planned. During my SURS years I worked for Very Low Pay in Exchange for Benefits as an electrical engineer. I always paid my way but it appears I’ll be “accepting benefits” in the future, near future?


  64. - Julie - Monday, Dec 2, 13 @ 9:36 pm:

    I read a statement in the Chicago Tribune that if this passes no pension monies can go towards health insurance. I am retired. Does this mean I will no longer get TRIP insurance if it passes?


  65. - Yankee - Monday, Dec 2, 13 @ 9:43 pm:

    I am a retired teacher earning $66,000/ yr. I have been retired ten years. My pension is more than I earned working except for my last two years of teaching. The state does not print money! I think we need to bite the bullet and be thankful for the pension we do receive. The pension system has been a Ponzi scheme for a good many years. Many, many people are worse off than us.


  66. - Ready To Get Out (soon) - Monday, Dec 2, 13 @ 10:04 pm:

    RNUG @5:07

    My papers have been submitted. I will soon be joining you on the other side of the fence.


  67. - Emily Booth - Monday, Dec 2, 13 @ 10:07 pm:

    I am a retiree and my pension is at 50% of my earnings. I don’t understand how a retiree can receive more in pension than what they earned? How does that happen?


  68. - RNUG - Monday, Dec 2, 13 @ 10:21 pm:

    Emily Booth @ 10:07 pm:

    Several ways, mostly due to the power of compound interest. Either lots of years of an AAI will eventually get it there, or you worked for the General Assembly that has a very aggressive formula per year compared to us average Joes & Janes, or you maxed out at the 75% or 80% level (depending on system) and then the AAI will get you there pretty quickly.


  69. - RNUG - Monday, Dec 2, 13 @ 10:23 pm:

    Rich,

    If tomorrow and the rest of the week go as I expect (bill barely passes, lawsuits filed), you might consider Lawyers, Guns and Money to close us out for the week. Not sure if a bluesy version or a harder rock version would be more appropriate.


  70. - RNUG - Monday, Dec 2, 13 @ 10:27 pm:

    Ready To Get Out (soon) @ 10:04 pm:

    Welcome to retirement where, if you don’t learn to say “no”, you will be busier than you ever were when you worked. Charities, historical associations, and hobbyist groups will all be knocking at your door. It has it’s rewards, but don’t overcommitt yourself.


  71. - RNUG - Monday, Dec 2, 13 @ 10:48 pm:

    I hear the train a coming round the bend … and it has a big lump of coal on it for all the retirees.


  72. - RNUG - Monday, Dec 2, 13 @ 11:30 pm:

    Rich,

    A second, maybe even more appropriate, suggestion for closing out Tuesday or the week: Life is a Lemon

    Here’s one of the shorter live versions:

    http://www.youtube.com/watch?v=8sZnQZHnVk4


  73. - Rebel - Tuesday, Dec 3, 13 @ 6:40 am:

    If a retiree is earning $66,000 after ten years in retirement that is good. But what would the employee be making if still employees and what has the employed lost each year since retirement. Add the yearly losses and the current benefit may not look so attractive. Additionally with the current legislation what percentage of the last 10 years gain will vanish in the next 10 years. Do the math ! And always remember that for many if us there is now other bread winner in the family, ours is not supplementary income.


  74. - Adjunct Professors - Tuesday, Dec 3, 13 @ 7:53 am:

    Are we supposed to ignore this problem like we do the comic opera of 75% of Illinois college instructors being adjunct? We are forced by law to pay into this scheme and we live in poverty. Are we supposed to feel sorry for the poor tenured professors who ride us like camels? We don’t. The party is over. The future is today!


  75. - plato - Tuesday, Dec 3, 13 @ 8:41 am:

    “those who are too smart to engage in politics are punished by being governed by those who are dumber”


  76. - thomas E dewey - Tuesday, Dec 3, 13 @ 8:50 am:

    No man should be in public office who can`t make more money in private life”


  77. - Al - Tuesday, Dec 3, 13 @ 9:47 am:

    I, too, am 59 and waiting for the retroactive COLA. I’ve been trying to wade through the current bill but can’t seem to find any place that would exactly address the issue. Anyone have any ideas?


  78. - Gor70 - Tuesday, Dec 3, 13 @ 10:35 am:

    When the U.S government bailed out the bankrupt AIG during the fiscal crisis, the AIG folks demanded their bonus money and even if the contracts they sold were all bad. The U.S. government told all of us that these people had a contract and that they were owned the bonus money even if the contracts they sold were bad. As a result all the A.I.G. folks got there bonus money. Little people never seem to have the law on their side, so what is law?


  79. - BbobH - Tuesday, Dec 3, 13 @ 11:31 am:

    This is the real disaster. It would cost Chicago retired teachers at least $350 more a month . How can they say our pension board can not use our money to subsidize healthcare?
    19 (40 ILCS 5/2-126.5 new) 20 Sec. 2-126.5. Use of contributions for health care 21 subsidies. The System shall not use any contribution received 22 by the System under this Article to provide a subsidy for the 23 cost of participation in a retiree health care program.


  80. - Proud Retired Educator - Tuesday, Dec 3, 13 @ 1:20 pm:

    Here are a couple of things to consider…
    First, if the legislature and the governor feel that this pension bill is absolutely constitutional then they should included the judges as well. I asked my state senator about this. He looked at me, got wide-eyed and smiled, never answering.

    Secondly, like any contract, once the legislature reopens it and starts making changes, you can bet they’ll keep going back to make changes again and again. Elaine Nekritz tipped her hand about this with a quote in the Daily Southtown (see below)…

    FROM THE SOUTHTOWN STAR, 11/30/2013
    Nekritz said that’s not the case and noted the bill’s so-called pension payment guarantee has “wiggle room.” “If the state fails to make a pension payment, a retirement system could file action in the Illinois Supreme Court to compel the state to make the required payment. But if the state faces a crisis, it could simply vote to change what the required payment would be, she noted, effectively working around that guarantee.”


  81. - Yankee - Tuesday, Dec 3, 13 @ 1:31 pm:

    Do the math! $66,000 after ten years retired. Last two years of teaching, I was given a 37% bump spread over two years plus my regular raise and seniority step. Earned $91,000 my last year of teaching— $100/ class. They gave me the bump to induce me to retire. I was 58 years old. Anyone who retired relying upon the 3% cola to survive probably should not have retired. Also, if you are retired, you are no longer the breadwinner. You are on the wagon being pulled by a breadwinner. Bumps should have been capped years ago. Yearly pensions should have been capped years ago. I personally know five administrators making a combined pension of over one million dollars. Wow, will they starve if the cola is reduced! Graduate the cola— the more you earn in a pension, the less your cola. Pass a graduated state income tax and put it toward the 80% of the budget not funding our pensions. I find it interesting that no one else stated what they are earning on their pension. It’ only fair. Of course, you will earn less if the cola is reduced. Do the math!


  82. - Robert/UNCOLA - Tuesday, Dec 3, 13 @ 2:49 pm:

    How can elimination of the 3% cost of living adjustment (COLA), replacing it with an arbitrary $30 per year served increase be constitutional?

    The Illinois Constitution (1970 Illinois Constitution, Article XIII, Section 5)clearly states, “Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”

    Which part of “shall not be diminished or impaired” is confusing?

    What is the point of passing the UNCOLA (UNCOnstitutional Legislative Act), which is clearly unconstitutional legislation and will waste taxpayer dollars defending an Act that will be tossed out by the courts?

    Surely the Illinois house and senate can come up with a bill that does not “diminish or impair” benefits.


  83. - Prez - Tuesday, Dec 3, 13 @ 3:35 pm:

    Let’s switch positions with all the smart people voting. Remember they depend on us to get elected.


  84. - cantbelievethis - Tuesday, Dec 3, 13 @ 7:54 pm:

    How can applying different COLA multipliers against years of service based on weather you draw social security be legal? Our Social Security (27 years) was already reduced because we worked in Illinois. Now they want to reduce our pension because we draw an already reduced Social Security? They just got through kicking all the Medicare eligible retirees and their dependents off of their state retiree health insurance forcing them into Medicare Advantage Plans. We need to go to court. This is criminal.


  85. - bouncer - Wednesday, Dec 4, 13 @ 6:20 am:

    What is the effective date? Every dollar of my supposed COLA will go to cover Medicare premium payments. Have to now start figuring out whether to eat or take my medicine.


  86. - xaviorscott - Wednesday, Dec 4, 13 @ 7:21 am:

    What is the date for the under 45 for the start of the sliding scale? To my understanding, the rule of 85 is gone for those under 45 with a new set date. Is that correct?


  87. - Adjunct Professors - Wednesday, Dec 4, 13 @ 8:23 am:

    You all lived too fat. Listen to yourselves? 75% of college instructors reaching today are adjunct and work full time for poverty wages. You expect us to keep working for poverty wages do you can earn a full-time salary in retirement? Would you? How has adjunctification of higher education affected learning outcomes? When have you tenured university professors ever stood in solidarity with us? I wish I felt something for most of you, but you never felt anything for us.


  88. - plato - Wednesday, Dec 4, 13 @ 4:15 pm:

    how many teachers have taught your represenative? you reep what you sow (great job!)


  89. - Rich Miller - Wednesday, Dec 4, 13 @ 4:17 pm:

    plato, before taking shots at lousy public school teachers, perhaps you could learn how to spell.


  90. - Anonymous - Thursday, Dec 5, 13 @ 3:08 pm:

    sorry rich for venting at the 5 tier plan. How can an Illinois judge rule? On his own pension?


  91. - charlie1976 - Thursday, Dec 12, 13 @ 10:13 pm:

    Can anyone tell me. If a state worker is retired before 2014 are they going to change the 3% annual increase or is the reduction for those who retire after 2013?


Sorry, comments for this post are now closed.


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