Latest Post | Last 10 Posts | Archives
Previous Post: Kennedy: Legislative campaign spending could reach $150 million this year
Next Post: Question of the day
Posted in:
* Greg Hinz…
After a day of furious damage control, the Rauner administration is hoping that it’s put back together a $1-billion-a-year state pension reform plan that would be passed by Senate President John Cullerton, with the governor’s help.
Rauner might get what he wants. Or not. It’s going to take a few days for the dust to settle. As Cullerton put it in a statement today, “Given the confusion, the best thing to do at this point is to get a proposal drafted so we know for sure what we all agree on. It’s important to make sure we’re all on the same page.”
Cullerton is being nice.
Reviving the deal that Illinois’ rookie governor blew up yesterday with his own rookie mistakes is going to require patience, persistence and tact. And even then, the deal likely faces opposition from House Speaker Mike Madigan, and a near certain challenge in court on constitutional grounds.
* Our resident pension expert RNUG agrees that it’ll face a stiff challenge based on prior cases…
This Cullerton proposal, to rephrase it, is capping the pensionable salary. The IL SC said in the SB-1 decision (as a footnote, I think) that you can’t impose a salary cap. They’ve also said it previously. Don’t think this will fly but we’ll have to wait for the court to say so.
Among many other things, the court also said this…
Accordingly, once an individual begins work and becomes a member of a public retirement system, any subsequent changes to the Pension Code that would diminish the benefits conferred by membership in the retirement system cannot be applied to that individual.
And this…
Additional benefits may always be added, of course (see Kraus v. Board of Trustees of the Police Pension Fund , 72 Ill. App. 3d at 849), and the State may require additional employee contributions or other consideration in exchange (see Gualano v. City of Des Plaines , 139 Ill. App. 3d 456, 459 (1985)). However, once the additional benefits are in place and the employee continues to work, remains a member of a covered retirement system, and complies with any qualifications imposed when the additional benefits were first offered, the additional benefits cannot be unilaterally diminished or eliminated.
posted by Rich Miller
Friday, Jan 22, 16 @ 12:11 pm
Sorry, comments are closed at this time.
Previous Post: Kennedy: Legislative campaign spending could reach $150 million this year
Next Post: Question of the day
WordPress Mobile Edition available at alexking.org.
powered by WordPress.
I thought the whole purpose of passing SB 1 was to find the parameters from the Illinois Supreme Court. How does this make sense? The supreme court case came out last year, and you already want to violate it?
Comment by 360 Degree TurnAround Friday, Jan 22, 16 @ 12:19 pm
They should both cut the BS and file an agreed bill. That’s about as ” in writing” as you can get.
Comment by Anon2U Friday, Jan 22, 16 @ 12:20 pm
Where’s the Speaker in this? In the game or on the sidelines?
Comment by Lincoln Lad Friday, Jan 22, 16 @ 12:24 pm
When the goal is to negate the existing pension debt, you just keep trying to find any loophole that might exist. The IL SC implied there might be one, but from what has been reported, this probably isn’t it.
Comment by RNUG Friday, Jan 22, 16 @ 12:24 pm
Look everybody, the State has to pay. PERIOD! Come up with a funding methodology that requires the STATE to pay what it owes. Employees have paid and pay every check into the fund(s). 35 years of structural deficits caused the 111 Billion shortfall. 5% Income tax allowed for full State contributions to be made and 3.75% won’t cut it. All IL taxpayers have benefitted from Illinois being a low income tax State and it’s time to pay the Piper. Don’t believe any more BS coming out of anybody’s mouth that doesn’t face the fact that we’re all on the hook for this money and have to pay it back to the Pension funds. Gov. Raunger and his team of “superstars” had better get that fact through their heads or start making plans for their next employment opportunity.
Comment by qualified someone nobody sent Friday, Jan 22, 16 @ 12:24 pm
Even if this were constitutional, and I agree with RNUG that it probably is not, how can Rauner make the case this will save 1 billion dollars, when the savings would come from not yet retired employees? My assumption is that this would lower the actuarial formula amount the state would need to contribute anticipating lower future costs in the current budget. But even here, this would be in my view hard to calculate. Is this how some you think Rauner is calculating his savings?
Comment by praxis Friday, Jan 22, 16 @ 12:24 pm
A lesson learned the hard way during the Blago years: the only way to deal with a governor like this whose word cannot be trusted is to put everything in writing.
Comment by Nope, Nope, Nope Friday, Jan 22, 16 @ 12:26 pm
Yes, in writing, and take all the white-out out of Springfield!
Comment by burbanite Friday, Jan 22, 16 @ 12:27 pm
Submit the legislation. That will put it in writing.
Comment by Anonymous Friday, Jan 22, 16 @ 12:28 pm
And I spoke with a lawyers who has spent a lot of time analyzing all of these decisions, and he agrees with RNUG - from what’s he’s read, this will not pass constitutional muster. So here we go again!
Comment by Archiesmom Friday, Jan 22, 16 @ 12:28 pm
Lincoln Lad- January 27th… January 27th. He’s waiting on the Governor.
Comment by Anon221 Friday, Jan 22, 16 @ 12:29 pm
I doubt there will be a discussion about pension reform by the Speaker or Senate President until there is a state budget.
Comment by Enviro Friday, Jan 22, 16 @ 12:30 pm
As has been stated in the past, I doubt that this proposal will 1)pass the House; and, 2)survive the ILSC challenge which will certainly follow. As “creative” as certain leaders are attempting to be in addressing public pensions anything short of an amendment to the Illinois Constitution isn’t going to be successful.
Comment by Stones Friday, Jan 22, 16 @ 12:30 pm
Lincoln Lad,
The speaker is conveniently saying NO to anything anyone else proposes. Not that he or his caucus have any new ideas of their own, as Zorn eloquently points out today.
Comment by Anonymous Friday, Jan 22, 16 @ 12:31 pm
–Cullerton is being nice.
Reviving the deal that Illinois’ rookie governor blew up yesterday with his own rookie mistakes is going to require patience, persistence and tact.–
Hinz is being nice.
The governor’s performance yesterday was scary trippy.
And he ain’t a rookie anymore. He’s had the gig for some time now.
That wasn’t any oompa-loompa strategery at work. That was the cannons unmoored, rolling uncontrolled across the deck of the ship of state.
One small bit of unsolicited advice: resist the urge to make “toilet” analogies. Not exactly “Peace through Strength” Reaganesque.
Comment by wordslinger Friday, Jan 22, 16 @ 12:34 pm
Time for the leaders to go on the offensive: no pension bill until there is a budget.
Comment by thechampaignlife Friday, Jan 22, 16 @ 12:34 pm
==I doubt there will be a discussion about pension reform by the Speaker or Senate President until there is a state budget.==
Wouldn’t that be ironic if Cullerton announces he will be glad to submit his pension bill - as soon as there is a budget passed?
Comment by Joe M Friday, Jan 22, 16 @ 12:37 pm
What are they thinking?!? The Illinois Supreme
Court has already ruled against any law designed
to reduce pensions for current public employees.
Comment by DuPage Friday, Jan 22, 16 @ 12:39 pm
Even if we accept the premise that this is constitutional, how are they going to get people to agree to a reduction of the 3% pension increase in exchange for receiving raises when the Governor’s plan is to freeze wages?
Comment by Pelonski Friday, Jan 22, 16 @ 12:41 pm
I posted this question earlier, but it fits here better:
Rauner is just being Rauner. But what is Cullerton up to? After the court’s decision on SB-1, he must know this would never pass judicial review. Is it a head fake to take away Rauner’s talking point that the Dem GA won’t cooperate? Is he trying to cover his derrière with his constituents?
Comment by X-prof Friday, Jan 22, 16 @ 12:43 pm
Consideration means quid pro quo. You give me something, I give you something. What is most important to me? TIME. I hope someone from the Governors office is reading this, because I have the solution. Give employees TIME and we’ll sacrifice the compounded interest for simple. For instance, give me 5 years time and age (so I can get out of here yesterday and max out my pension) and I’ll take the simple interest or half of cpi. As a police officer, I can then get out at 45 and 80% instead of 50 and 80%. I wouldn’t even get the simple cola raise for ten years (age 55). This would be a sure fire way to get a lot of the Tier 1 people off the books. If you’re lucky, we might even kick the bucket at age 55.
Comment by Senior Master Trooper Friday, Jan 22, 16 @ 12:44 pm
Maybe the President will put the agreement with the Rauner Admin in a Memorandum of Understanding. When was the last time this was used? Anyone remember that Governor’s name? /s
Comment by Here & There Friday, Jan 22, 16 @ 12:44 pm
===Rauner is just being Rauner. But what is Cullerton up to? ===
Being Cullerton. He loves cutting deals and making policy.
Comment by Rich Miller Friday, Jan 22, 16 @ 12:47 pm
Just because Cullerton’s proposal is “less unconstitutional” than the last pension law was doesn’t make it constitutional. He needs to get better advice.
Comment by Anonymous Friday, Jan 22, 16 @ 12:48 pm
Bruce thinks he’s “president” of Illinois Inc. Well he’s not. He represents all people of Illinois. If he doesnt like it then he should resign. He is NOT very good at politics.
Comment by Jack Stephens Friday, Jan 22, 16 @ 12:52 pm
I hope the actuaries are figuring the effect that continuing to pay employee/state contributions only on the pensionable salary has on any ’savings’
Comment by Thoughts Matter Friday, Jan 22, 16 @ 12:53 pm
Isn’t pensionable salary already capped? (See Tier II)
This seems like an kicking the can down the road - avoiding pay for the debt incurred.
Comment by Qui Tam Friday, Jan 22, 16 @ 12:53 pm
Write it up, get it passed, get it declared unconstitutional and then make a plan for raising revenue.
Comment by Dr X Friday, Jan 22, 16 @ 12:54 pm
=Just because Cullerton’s proposal is “less unconstitutional” than the last pension law was doesn’t make it constitutional. He needs to get better advice=
This^^^^.
They have to pay up and it cannot be on backs of employees. What a waste of time this will be. Again.
Comment by sparky791 Friday, Jan 22, 16 @ 12:56 pm
Rauner’s no rookie after a year on the job.
A month, yes. You’re a rookie.
A year plus? You’re a governor. So act like one.
Comment by Frenchie Mendoza Friday, Jan 22, 16 @ 12:57 pm
For the life of me, I cannot understand why they don’t just bite the bullet and re-amortize the payback. I know it will cost more in the long run, but when the last plan was passed the state owed $100 billion. Now we’re at $111 billion. Some savings that turned out to be.
Comment by Past the Rule of 85 Friday, Jan 22, 16 @ 12:57 pm
Thanks, Rich. It didn’t take long to form an opinion of what makes Madigan and Rauner tick. But from where I sit, Cullerton is hard to read. Sure, he can cut a deal here, but I can’t see any path where this proposal would become actual policy in fact (in law and approved by the ISC).
Comment by X-prof Friday, Jan 22, 16 @ 12:58 pm
It’s called a bill. They’re always in written form. #GeniusIdea
Comment by Georg Sande Friday, Jan 22, 16 @ 1:05 pm
What will pass constitutional muster other than a plan that gives workers among their choices one that allows them to keep their current benefit?
Comment by The Dude Abides Friday, Jan 22, 16 @ 1:05 pm
Is the the start of the MOU?
Comment by Huh? Friday, Jan 22, 16 @ 1:14 pm
“Rauner’s no rookie after a year on the job.”
Sophomore slump? Sorta like Nikola Mirotic?
Comment by a drop in Friday, Jan 22, 16 @ 1:15 pm
Accordingly, once an individual begins work and becomes a member of a public retirement system, any subsequent changes to the Pension Code that would diminish the benefits conferred by membership in the retirement system cannot be applied to that individual.
That is the key and it is purposely being ignored.
Then throw it to the ISC again and hope you (the state) can get better results. If you don’t “You Tried.” Really lame!
Comment by Anonymous Friday, Jan 22, 16 @ 1:27 pm
to make it constitutional, they would have to bite the bullet and increase say the percentage of the pension from 75% to something greater, then they could offer a choice between COLA increase or capping salary. Then they could also increase the amount teachers currently pay into TRS (9.4% currently). It still doesn’t and won’t fix the current issue for the state. The money they owe is the money they owe……
Comment by unfortunately a teacher Friday, Jan 22, 16 @ 1:28 pm
- praxis - Friday, Jan 22, 16 @ 12:24 pm:
Even if this were constitutional, and I agree with RNUG that it probably is not, how can Rauner make the case this will save 1 billion dollars, when the savings would come from not yet retired employees? My assumption is that this would lower the actuarial formula amount the state would need to contribute anticipating lower future costs in the current budget. But even here, this would be in my view hard to calculate. Is this how some you think Rauner is calculating his savings?
You got it!. But with Rauner it is more about union busting and spin to the public than anything else.
Comment by Federalist Friday, Jan 22, 16 @ 1:29 pm
The sophomore slump for CEOs:
https://www.bcgperspectives.com/content/articles/leadership_talent_people_management_human_resources_surviving_sophomore_slump_moves_matter_most/
Comment by Anon221 Friday, Jan 22, 16 @ 1:30 pm
“Accordingly, once an individual begins work and becomes a member of a public retirement system, any subsequent changes to the Pension Code that would diminish the benefits conferred by membership in the retirement system cannot be applied to that individual.”
Yep, that says it all. But it makes no difference.
Just throw it to the ISC again. And then the State can say “It Tried.”
Really lame. but both parties seem to be quite willing to play that game.
Comment by Federalist Friday, Jan 22, 16 @ 1:32 pm
This reads like a comic strip. How much money does our state have to blow on court fights rather than paying down the debt? Money for anything/anyone but the people who have earned the right to it? Why is this tolerable to anyone in the pension system or still working in public service? Apparently, taxpayers would rather gamble with tons of their tax dollars to get a favorable ruling by the court stiffing the workers entitled to the money that was wrongfully taken from them?
Sick stuff.
On the other hand, demonizing public workers and ramping it up in the public eye (to frenzy proportions) works very well as a diversion —a bait and switch–from the lack of budget progress and real consideration of generating the necessary revenue we need—and HAVE needed- in this state. So I guess I get why this has to happen for Rauner. It just has to be played out this way. And public workers will have to resign themselves to being an inferior class of Illinois citizen, if they want to serve the other citizens of the state.
Comment by AnonymousOne Friday, Jan 22, 16 @ 1:40 pm
=== Give employees TIME and we’ll sacrifice the compounded interest for simple. For instance, give me 5 years time and age (so I can get out of here yesterday and max out my pension) and I’ll take the simple interest or half of cpi. ===
They did that 14 years ago. It ended costing a lot more than anyone bargained.
The problem is that any “deal” that is sweet enough to convince plan members to risk what they are already guaranteed in exchange for something they might not ever see any way is going to end up costing far more in GRF than it will ever save in pension costs.
I’d also love to see the math. I don’t think that the current estimate of the pension debt includes any future salary increases now, so I’m not really clear how they think excluding future salary increases from pension funding formula is going to reduce the state’s estimated pension debt.
Perhaps RNUG can help with that one?
But again, I warn: the price tag for the state’s last buy-off program, the early retirement under Ryan, was dramatically underestimated by everybody.
Comment by Juvenal Friday, Jan 22, 16 @ 1:42 pm
Was Eric Madier in on Cullerton’s (mis)interpretation of “consideration” — or did Cullerton come up with this on his own, post-Madier?
Comment by Joe M Friday, Jan 22, 16 @ 1:44 pm
Let’s forget about constitutional vs. unconstitutional for a moment. Cullerton worked with AFSCME on his previous reform proposal and got their blessing. Therefore, if AFSCME in ‘on board’ constitutionality is a moot point. Then it comes down to whether or not Madigan will call it for a vote. But now, with Rauner hammering away at AFSCME at every turn, would they be as agreeable to pension reform that takes something away from workers as they were before?
Comment by Cubs in '16 Friday, Jan 22, 16 @ 1:44 pm
For someone who has reached retirement age or the rule of 85, considering we won’t get a raise anyway, sign the agreement that no future pay will count and that you’ll get the 3% compounded cola, then you have the constitution AND this agreement backing you.
Comment by Crispy Critter Friday, Jan 22, 16 @ 1:45 pm
To fix the pension, I would propose the unions agree to pay 1% more to the pension for 4 years, but the employees also get a 1% raise each year, then after 4 years, the employees are paying the full 8% towards the pension, then the state can pay only what is need to catch up, but in essence then the employees are making the full contribution to the system. Then also have the unions pick an accounting firm to oversee the pension funds so that they are not dipped into ever again. If the accounting firm does good work, hire them again, if not, the unions hire another firm to oversee the funds. At least this would get it funded and the politicians could quit bickering over how to fund it.
Comment by Crispy Critter Friday, Jan 22, 16 @ 1:52 pm
Cubs 16, but AFSCME said all along that Cullerton’s proposal back then was unconstitutional - and that they were just going along to cover their bases. But after the Supremes shot down making retirees pay more for health ins - then Cullerton’s bill became obsolete. Now Cullerton has replaced health ins with wage increases as a way to shoot oneself in the foot. But after the Supremes shot down SB1, any of these double-negative consideration bills probably won’t appeal to AFSCME or any other union whose members are part of the state pension systems. Or individuals either.
Comment by Joe M Friday, Jan 22, 16 @ 1:57 pm
++Reviving the deal that Illinois’ rookie governor blew up yesterday with his own rookie mistakes is going to require patience, persistence and tact.== What does it take to stop being a rookie? One year on the job? Signing your first budget? Adjournment of a legislative session?
Comment by SAP Friday, Jan 22, 16 @ 2:00 pm
Pension reform has been done, and it’s called tier 2.
Comment by Anonymous Friday, Jan 22, 16 @ 2:04 pm
@Joe M,
I agree with your points. With regard to Cullerton’s previous proposal, I heard that AFSCME was in agreement suggesting there would be no court challenge had it passed (or even called for a vote in the House). I could be misinformed however.
Comment by Cubs in '16 Friday, Jan 22, 16 @ 2:09 pm
Cub 16 and others - This has nothing to do with union positions. The pension is considered a contract between the individual employee and the state. Also, there are categories where no union represents the employees, for example, faculty in SURS. Bottom line, no union can bargain away any employee’s established pension rights, even if they wanted to.
Comment by X-prof Friday, Jan 22, 16 @ 2:11 pm
Sophomore slump?? Are you kidding me? You gotta have an increase to “slump” from. Rauner has done zero, what is there to slump FROM??? More like he is just starting his ‘terrible twos’ phase.
Comment by East Central Illinois Friday, Jan 22, 16 @ 2:11 pm
The more I read about this issue the more convinced I become that the State needs to figure out some ERI to start moving Tier 1s off the books. It can’t be as generous as 2002, but I think many would take a lot less to go away. Then reamortize and start paying what is owed.
Comment by Original Rambler Friday, Jan 22, 16 @ 2:12 pm
@X-prof,
I understand a union can’t bargain away pension rights but they CAN file a lawsuit on their employee’s behalf correct? The point I was trying to make is Cullerton had the wisdom to consult with AFSCME on his previous pension proposal to determine if they were on board. And if they were, presumably, there would no court challenge.
Comment by Cubs in '16 Friday, Jan 22, 16 @ 2:16 pm
The billion a year in savings will be part of the smoke and mirrors section of the upcoming fy16 and fy17 budget combo.
Comment by Cassandra Friday, Jan 22, 16 @ 2:20 pm
Perhaps Cullerton is has, and will, propose pension legislation he knows is actually unconstitutional until the next governorship election or some Republican legislators feel they have an opportunity to disagree with Rauner’s position and take an alternative action.
Comment by Buzzie Friday, Jan 22, 16 @ 2:20 pm
Cubs in ‘16 - Friday, Jan 22, 16 @ 1:44 pm:
Let’s forget about constitutional vs. unconstitutional for a moment. Cullerton worked with AFSCME on his previous reform proposal and got their blessing. Therefore, if AFSCME in ‘on board’ constitutionality is a moot
No its not a moot point. The pension is an individual contract, not a union contract/benefit. The Union was just onboard to the extent they wouldn’t provide the lawyers for retired members who wanted to sue. Any retiree could challenge on their own.
same problem with Crispy Critters comment. The 4% pension contribution is an employee amount for all employees, union and MC,
Comment by Anotheretiree Friday, Jan 22, 16 @ 2:23 pm
== The more I read about this issue the more convinced I become that the State needs to figure out some ERI to start moving Tier 1s off the books. It can’t be as generous as 2002, but I think many would take a lot less to go away. Then reamortize and start paying what is owed. == Rauner was looking at an ERI for 3 years and then stipulated those who retired would not be replaced for a period of 5 years. It makes sense that the earlier they retire, the less they are paid. Do the math in Excel and getting them out earlier does save in the long haul since they are paid less over the next say 25 years.
Comment by Crispy Critter Friday, Jan 22, 16 @ 2:23 pm
Cubs 16 - If AFSCME didn’t sue when confronted with unconstitutional diminishment, some other group would. In fact, several separate suits were filed against SB-1 and then merged by the courts into a single case.
This is all academic after the ISC’s decision on SB-1. There’s no way AFSCME or any other group would accept Cullerton’s proposal now.
Comment by X-prof Friday, Jan 22, 16 @ 2:27 pm
“Less unconstitutional” is like being less pregnant. Long past time to abort this scheme. If I recall correctly, the City of Chicago tried to argue before the Supreme Court that cuts were constitutional because a union agreed and the justices (Thomas I think) were extremely dismissive. Waiting on that opinion.
Comment by Anonymous Friday, Jan 22, 16 @ 2:27 pm
I think that to be attractive, ERI’s have to be more expensive (to taxpayers) than they are worth. I believe the Ryan administration one turned out to be quite costly to taxpayers.
Comment by Cassandra Friday, Jan 22, 16 @ 2:35 pm
Crispy C: ===then after 4 years, the employees are paying the full 8% towards the pension, then the state can pay only what is need to catch up, but in essence then the employees are making the full contribution to the system.===
You understand that the employees have always had the full 8% deducted from their paychecks with no exceptions, right? It’s only the state (= all of us taxpayers) that hasn’t paid its matching contribution. It’s true that the state could put in a bit less than a full match and still have a stable pension system, but that’s always been the status quo. No new laws needed for that.
Comment by X-prof Friday, Jan 22, 16 @ 2:43 pm
If Rauner negotiates a contract with AFSCME that includes no pay raises then that in effect is one of the choices this proposal offers - keep your 3% annual but not on raises. Don’t waste time in court. Don’t produce a budget with false savings. Move on.
Of course that would mean cuts and a tax increase to make pension payments and a balanced budget. Which we’ve known for years has to happen.
Comment by Sir Reel Friday, Jan 22, 16 @ 2:44 pm
Thank you for the clarification - Anotheretiree - and -X-prof-. That’s what I like most about this blog…I’m always learning new stuff.
Comment by Cubs in '16 Friday, Jan 22, 16 @ 2:45 pm
As far as “rookie mistakes” and “sophmore slumps” go, keep in mind that Gov. Rauner said his greatest accomplishment to date was signing the K-12 approp bill that he muscled every GOP legislator to vote against.
You can’t make that stuff up.
Comment by wordslinger Friday, Jan 22, 16 @ 2:47 pm
All good, Cubs.
Comment by X-prof Friday, Jan 22, 16 @ 2:52 pm
Before you take any deal, run the numbers; the math isn’t that hard with a spreadsheet and they can be eye opening! With both the current “choices”, you are leaving some serious money on the table.
Someone brought up Tier 2 being capped; that is true but those employees hired on with that as part of the deal. Can’t change the Tier 1 deal.
ERI - as others mentioned, both the too good the pass up 2002 deal and the so-so 2004 deal were expensive to the State. IF we ever see another one, it will be the end of 2017 so the politically connected can bail when it looks like Rauner will be a loser.
That, by the way, is how the 2002 deal came to be; initially just for a few political insiders but then found out it had to be offered to everyone, so instead of 1,000 or 2,000 going, 11,000 left … which exploded the cost estimates.
Comment by RNUG Friday, Jan 22, 16 @ 2:57 pm
X-prof - I pay 4% into retirement and also pay social security. My pay stub gross pay X .04 equals the amount stated as retirement contributions. Others pay more for retirement but have no social security taken out.
Comment by Crispy Critter Friday, Jan 22, 16 @ 2:59 pm
now pay raises are not required, although colas which have always been awarded may be… setting that aside a true consideration program would be to offfer a guaranteed wage increase, or extta time off, or even a variant of an early out package for those who switch to the new option.
as an example, choose the reduced annual inc option as a retiree (mislabeled a cola) in exchange for a 5 and 5 credit. (credit for 5 years of service and 5 years of age) triggered or added on when you retire if you switch to the nee option. THAT would be a consideration scenerio. but this idea that you take away, and the. offer back at a reduced benefit aint consideration.
of note, employees pay 1% per year for the annual increase option, ao the employee contribute/pay for that benefit.
Comment by Ghost Friday, Jan 22, 16 @ 3:06 pm
OK, I see. You’re right, there are differences across the different retirement systems and different categories within each one. I don’t - er didn’t - pay or get credit for SS.
Comment by X-prof Friday, Jan 22, 16 @ 3:09 pm
Can someone explain to me why we need to be 100% funded? Wouldn’t 80% be sufficient? RNUG? Seems like re-amortizing the ramp at 80% would be the solution to the pension crisis.
Comment by Senior Master Trooper Friday, Jan 22, 16 @ 3:18 pm
-X-prof-
There are 5 different systems, and often 2 or more see of rules within a system (not including the Tier 2 variants), so it’s tough to generalize.
Comment by RNUG Friday, Jan 22, 16 @ 3:19 pm
-Senior Master Trooper-
Yes, most people agree 80% would be just fine.
But using 100% inflates the required amount / annual payment and makes for larger / scarier numbers. If
Comment by RNUG Friday, Jan 22, 16 @ 3:23 pm
Lost the last sentence…
If you are trying to create the appearance of a crisis, the bigger / more dire the numbers, the better.
Comment by RNUG Friday, Jan 22, 16 @ 3:24 pm
So the Supremes tell everyone that additional contributions would be acceptable. Why doesn’t anyone ever go there? Don’t know the numbers but what if employees have to contribute an extra .5% each year? Should have been done while salaries were doubling but better late than never. Even a .5% offset in salary may result in long term stability for the funds and less $ required from the state.
Comment by Sense of a Goose Friday, Jan 22, 16 @ 3:24 pm
Does anyone know what rate of return the retirement systems get for the money that is invested? I read a couple years ago that the TRS had gotten around 13.75% return each year for the past 15 or so years. Yet at the same time they use a much lower estimate to deflate what they expect to get in order to create a scarier number on their projections. I have heard some say the 111 Billion deficit is actually on 1/2 that amount if they use the correct numbers to project. I don’t know which is why I am asking.
Comment by Crispy Critter Friday, Jan 22, 16 @ 3:32 pm
Thanks RNUG.
Crispy Critter—I’d be more than happy to contribute more as long as the cola matches the percentage. For instance, I’ll contribute 2% more for a 2% cola with no corresponding bump in my final payout percentage. I talk to a lot of my co-workers and they seem to be onboard with this idea, but the union never touches it. Must be taboo.
Comment by Senior Master Trooper Friday, Jan 22, 16 @ 3:46 pm
Crispy Critter—I’d be more than happy to contribute more as long as the cola matches the percentage. For instance, I’ll contribute 2% more for a 2% cola with no corresponding bump in my final payout percentage. I talk to a lot of my co-workers and they seem to be onboard with this idea, but the union never touches it. Must be taboo.
Sorry, I meant to address Sense of a Goose
Comment by Senior Master Trooper Friday, Jan 22, 16 @ 3:48 pm
Re the AAI: the percentage paid by employee was chosen / set by the state with financial experts input. It is supposed to be enough to pay for that benefit.
And for those thinking about trading it off, remember (1) it is a protected benefit and (2) you paid / are paying for it. Run the numbers, you would be giving up roughly 1/3 (over time) of your EARNED and PAID FOR retirement.
Comment by RNUG Friday, Jan 22, 16 @ 4:03 pm
Is this a way for the gov to pass something, declare victory, cave on most of the agenda and finally pass a budget. SB1 was a way to kick the kick the can down the road amd this might be more of the same.
Comment by relocated Friday, Jan 22, 16 @ 4:36 pm
SB1 was a way to kick the kick the can down the road amd this might be more of the same.
Another 10 years of trying to find the “magic” pension bill that will reduce pension costs and pass Constitutional muster, and a good portion of the Tier 1 employees will have joined the protected retiree class.
Comment by Anonymous Friday, Jan 22, 16 @ 4:54 pm
That was me at 4:54.
Comment by Six Degrees of Separation Friday, Jan 22, 16 @ 4:55 pm
Can’t see why Cullerton is on this. Raunner? Let’s him show fictitious savings.
No way this won’t be challenged. So, no way this gets resolved in FY16 and mostly likely FY17…..UNLESS
The Supremes are REAL tired of this and relatively quickly send back a message saying: ‘What about our last decision don’t you STILL understand?’
Comment by sal-says Friday, Jan 22, 16 @ 5:11 pm