Unintended consequences
Monday, Dec 5, 2011 - Posted by Rich Miller
* Chris Wetterich has written an excellent story about how the recent pension reform legislation designed to stop “union abuses” might include some unintended consequences…
HB3813 says someone on leave while working for a union has to contribute [to the pension system] based on the worker’s union salary, but that the final average salary has to be calculated using their public employee salary, adjusted for inflation.
The problem, [House Majority Leader Barbara Flynn Currie] says, is that the bill says that this is “a declaration of existing law and shall not be construed as a new enactment.”
“The General Assembly is telling the pensions that they have been miscalculating benefits for years,” she said. “It’s reasonable to assume that the pension funds will need to recalculate the final average salary of any retiree who took leave. This could result in a substantial reduction in benefits or even no benefit for those current retirees.”
Senate Democrats, who rewrote the bill before it came to the House on Tuesday, stridently disagree with Currie for two reasons:
–The Illinois Pension Code says changes to the code don’t affect current retirees unless legislators specifically say in the bill that they should.
–House Minority Leader Tom Cross, R-Oswego, HB3813’s sponsor in the House, read a series of statements known in General Assembly parlance as “legislative intent” into the record before the vote. […]
Currie believes the Senate was concerned that union leaders would sue and argue the bill is an unconstitutional change in existing benefits. The Illinois Constitution bars the state from diminishing pension benefits, which are like a contract between the state and local governments and their employees, once they are hired.
“We know that the Senate parliamentarian, Eric Madiar, is very much of the view that we can’t make changes in midstream,” Currie said. “So here he’s got this little problem: Are we going to go ahead with this bill, which may raise the same question? I think that their solution language that says ‘declarative of existing law’ gives him a place to hang his hat.”
This is what happens when the GA writes legislation based on newspaper editorials. Not good. Go read the whole thing.
- AC - Monday, Dec 5, 11 @ 7:25 am:
I always thought poorly written legislation was deliberate act.
- Lakeview - Monday, Dec 5, 11 @ 9:04 am:
Well, this is also what happens when the GA writes laws to help friends and when unions tolerate featherbedding. Now we’re in the classic “two wrongs don’t make a right” mode of passing legislation.
- Colossus - Monday, Dec 5, 11 @ 9:29 am:
When it comes to crappy surprises in HP3813, I believe they are referred to as features, not bugs.
- DuPage Dave - Monday, Dec 5, 11 @ 9:31 am:
This is similar to the situation where David Vaught sent a memo assuring non-union staff that taking furlough days would not affect their pensions. Less than 24 hours later the SERS folks said, well, sorry Dave, but you can’t re-write the pension laws all by yourself.
I don’t believe Vaught was ever a legislator, but our current legislators should know the laws before they go around messing with them.
- Hoping for Change - Monday, Dec 5, 11 @ 9:41 am:
“The Illinois Constitution bars the state from diminishing pension benefits…”
Any time I hear someone hiding behind the Illinois Constitution these days, I ask myself “Is this part of the Illinois Constitution that can be enforced, is this part of the Illinois Constitution that cannot be enforced, or is this part of the Illinois Constitution that the ruling class doesn’t want to enforce?”
- Anonymous - Monday, Dec 5, 11 @ 10:41 am:
“…the ruling class doesn’t want to enforce?”
By “ruling class” do you mean Quinn, Madigan or Cullerton? Or all of them, as kind of a triumvirate brain trust?
- Rich Miller - Monday, Dec 5, 11 @ 11:15 am:
===hiding behind the Illinois Constitution===
Who are you, Hitler?
- The Ogden Avenue Shoplifter - Monday, Dec 5, 11 @ 11:16 am:
I would have to agree with Barb Currie. The bill was very poorly drafted in the Senate. It doesn’t matter that the legislation didn’t specify that it had no applicability to current retirees. The bill very clearly states that the legislature determines that current law does not allow pensions to be based on union salaries. If you’re going to affirm or clarify current law rather than make new law, then you’ve got to own up to or at least acknowledge mistakes made under current law. If someone had their pension calculated under a method that was not permitted under current law, then a recalculation of that pension would appear to be permissible. Nevertheless, the House version of the bill was much better - it stopped the union spiking practice going forward without trying to restate current law.
- soccermom - Monday, Dec 5, 11 @ 11:41 am:
When you stand up in front of hundreds of people and take an oath to defend and support the Constitution, I don’t think that counts as hiding.
- Retired Non-Union Guy - Monday, Dec 5, 11 @ 12:13 pm:
Poorly drafted bill; potentially unconstitutional. Like trying to kill a mole with a bunker buster bomb. The only good part is stopping future abuses.
If the Legislature wanted to remove the two individuals, they would have been better served by directing TRS to administratively (try to?) prove, regardless of the previous bill’s language, that one day of actual service didn’t meet IRS rules for pension vesting (generally 8 years), and thrown the two individuals out on those grounds. If that option was viable, they could have avoided the whole Constitutional issue.
- Carl Nyberg - Monday, Dec 5, 11 @ 12:38 pm:
When I’ve talked to legislators and political insiders on pension abuse issues, I always get one excuse or another why the issue can’t be addressed.
I’ve concluded the legislators don’t want to fix the issue because the biggest beneficiares are political insiders and others closely connected to legislators.
It’s not that hard to curtail abuses if you actually want to curtail abuses. There are 168 members of the General Assembly? Not one of them is smart enough with words to write a law that curtails pension abuses without having weird and undesirable secondary consquences?
I am skeptical. I suspect the smartest minds in the General Assembly put their efforts into crafting legislataion that was specifically designed to be unpalatable.
- Michelle Flaherty - Monday, Dec 5, 11 @ 1:24 pm:
Haven’t seen this many armchair justices of the Supreme Court since the Capital Bill was challenged and everyone so sure that hastily thrown together piece of junk was soooooo unconstitutional and would be tossed in record time.
Whoops.
- Rich Miller - Monday, Dec 5, 11 @ 1:25 pm:
===everyone so sure that hastily thrown together piece of junk was soooooo unconstitutional and would be tossed in record time===
Surely, you jest.
- Bob - Monday, Dec 5, 11 @ 6:17 pm:
I guess some of the AFSCME staff reps are running for the door. Heard some are resigning from state jobs to keep current pension and continuing to work for AFSCEME