Pension roundup
Thursday, Feb 28, 2013 - Posted by Rich Miller
* As I told you yesterday, House Speaker Michael Madigan is holding yet another “weekly order of business” today, but this time on pension reform. He has four amendments, two each to HB1154 and HB1165.
Keep a close eye on our live session coverage post for updates.
The SJ-R summarizes the Madigan amendments…
* End cost-of-living adjustments to pension benefits for anyone hired before Jan. 1, 2011. Retirees now receive a 3 percent compounded COLA annually. Other pension proposals have called for limiting COLAs, but not eliminating them.
* Stipulate that COLAs would be eliminated until the pension systems achieve an 80 percent funding level. The five state-funded pension systems now have a funding level of about 39 percent.
* Raise the retirement age at which a person could collect full pension benefits to 67.
* Increase working employees’ contributions to their pensions by 5 percent of salary, in addition to what employees already pay into the system. Other pension plans have called for higher employee contributions, but in the range of 2 percent or 3 percent.
* AP…
They include elimination of pension cost-of-living increases, an apparently extreme measure that Madigan put forth as a serious potential remedy because “there’s a huge problem,” spokesman Steve Brown said.
“Everything’s serious,” said Brown, “and it’s just, keep working on the issue until we can find a majority of the Legislature willing to pass a bill and send it to the governor.”
* Meanwhile, as we’ve already discussed, Rep. Elaine Nekritz and House GOP Leader Tom Cross have introduced a retooled pension reform plan…
But don’t expect any immediate budget savings…
Cross and Nekritz said their legislation could save the state $2 billion a year. But it wouldn’t take hold immediately and help lawmakers with the budget they’re working to craft now.
“We still have enormous fiscal pressures,” Nekritz said.
* Senate President Cullerton is OK with the new language, but still wants his own plan to be part of the solution…
Illinois Senate President John Cullerton is on board with the newest Illinois House pension solution plan.
Spokeswoman Rikeesha Phelon says the Chicago Democrat plans to amend his proposed pension fix with language from a bipartisan House plan announced Wednesday. But Cullerton would retain other provisions he says would ensure the plan’s constitutionality.
* Related…
* Speaker gears up test votes on pension proposals
* New pension reform plan surfaces in Springfield
* House GOP OK with new cost-shift on pensions
* Editorial: Illinois stands to run off road
- Mittuns - Thursday, Feb 28, 13 @ 10:16 am:
Any pension concessions/agreement in lieu of the tentative new contract?
- Grandson of Man - Thursday, Feb 28, 13 @ 10:20 am:
Though I certainly can’t and won’t speak for other state workers in the pension systems, if I have to, I don’t mind paying a little more into my pension and health insurance. I do mind having to work to age 67 to collect a full pension, so I am against this particular amendment. I would rather be able to retire earlier and get a smaller full pension than have to work to age 67.
- walkinfool - Thursday, Feb 28, 13 @ 10:24 am:
You wanted “bi-partisan”? You got it with Nekritz/Cross.
Read it and weep, then get over it.
Painful, and “unfair” to both sides, as it simply must be. These are courageous legislators!
Politically destructive to both sides as well — probably more destructive to the Dems, which might be historically appropriate.
- wordslinger - Thursday, Feb 28, 13 @ 10:31 am:
Nothing on health-care costs for retirees? If that’s off the table it’s a win already.
- Grandson of Man - Thursday, Feb 28, 13 @ 10:47 am:
I thought Madigan was against raising the retirement age. I’m sorry to see that he filed this amendment. I’d rather pay more into my pension and retire earlier.
- Jack - Thursday, Feb 28, 13 @ 10:47 am:
I am okay with the Cross / Nekritz proposal, but would like to see that COLA limit a bit higher. Maybe $30k.
- huggybunny - Thursday, Feb 28, 13 @ 10:52 am:
@walkingfool 10:24am
Read it and weep, then get over it
I wouldn’t do your happy dance just yet-I’m going to wait until the Supremes do their thing and then depending on what they “vote” cry tears of joy or sorrow. Long road ahead of us on the pension mess, this won’t be over in a week.
- wordslinger - Thursday, Feb 28, 13 @ 10:57 am:
–If our GA did what they did to a private pension, they would all be in jail.–
Lot of corporate execs in jail for shorting private pensions?
All they have to do is go into bankruptcy court, dump their obligations, and come out clean on the other side?
- Both Sides Now - Thursday, Feb 28, 13 @ 11:00 am:
We keep hearing about the effects on those “hired before January 1, 2011″; what happens to those hired after January 1, 2011?
- DanL60 - Thursday, Feb 28, 13 @ 11:03 am:
Transferring responsibility, at least in part, back to local boards-where does that stand?
- DisgustedOne - Thursday, Feb 28, 13 @ 11:05 am:
Few expect anything moral or ethically stellar from the corporate world. It’s clear that they need more and more money. We do have slightly different expectations from our elected (although in this state, we’ve come to settle and expect so much less). When our elected are dealing with everyone’s tax dollars and contributions, I think most people don’t expect to get robbed blind. If we’ve come to accept robber baron mentality from our legislators, why have so many of our governors gone to jail? The point is, they ARE different from corporate execs in the private sector. Do execs take any oaths?
- retired and fed up - Thursday, Feb 28, 13 @ 11:08 am:
Those hired after 1/1/11 are Tier 2.
- Retiree - Thursday, Feb 28, 13 @ 11:19 am:
I made my contributions and met my side of the contract- I’ll see them in court.
- pensioner - Thursday, Feb 28, 13 @ 11:19 am:
Unconstitutional.
- Downstater - Thursday, Feb 28, 13 @ 11:39 am:
Sounds like a sensible solution for the citizens on Illinois.
- titan - Thursday, Feb 28, 13 @ 11:57 am:
To the extent that the changes are retroactive, they will be tough to get through court. To the extent that they’er not, they don’t help the state’s bottom line much.
- Mouthy - Thursday, Feb 28, 13 @ 12:06 pm:
I read the amendment to increase the total employee funding to a total of 5% not an increase of 5% to the current funding level. Did I read it wrong?
- Scottish - Thursday, Feb 28, 13 @ 12:27 pm:
@Mouthy - I read it that way at first also, but upon further review it specifies the 5% is in addition to any contributions already required in other Sections.
- Mouthy - Thursday, Feb 28, 13 @ 12:35 pm:
Thanks Scottish.
- mokenavince - Thursday, Feb 28, 13 @ 12:56 pm:
I would bet nothing gets done and we punt til next session.These guys get paid either way.
- Stones - Thursday, Feb 28, 13 @ 1:09 pm:
It seems unconstitutional to eliminate the COLA’s. We’ll see how the Court’s rule if this passes.
I would prefer to increase my contribution if that would be a solution to the problem.
- fairR - Thursday, Feb 28, 13 @ 1:44 pm:
It is not fair to break a contract or change the rules in the middle of the game…should we honor the contracts with the corporate world or quite paying our bills because we can’t afford it…contracts are sacred…with that said changes should be made with this in mind
- Demoralized - Thursday, Feb 28, 13 @ 1:56 pm:
Let’s see . . . no raises for a decade, and now they want to essentially cut my salary by 5% by making me pay that much more for my pension, not give me any COLAs when I retire, and hold my retirement until I’m 67. I’ve been preparing my resume to leave my current job. No reason to stay if this happens. I’ll go somewhere where I can invest my own money and determine my own retirement age. Of course I’m going to sue the pants off of them to fight for what’s rightfully mine first.
- chuck - Thursday, Feb 28, 13 @ 2:12 pm:
Here in Chicago we paid for our cola and they cant take away what we paid for.Go to you tube and watch Eric Maddar.Also you can sue the State for not paying their share into the pension fund.
- rusty618 - Thursday, Feb 28, 13 @ 2:16 pm:
It looks like all of Madigan’s bills failed miserably!
- Ronbo - Thursday, Feb 28, 13 @ 2:39 pm:
HB 1154, Amendment 1 (eliminates COLAs) — failed with only 2 in favor, 66 opposed
HB 1154, Amendment 2 (eliminates COLAs unless system is 80% funded) — failed with only 5 in favor, 62 opposed
HB 1165, Amendment 1 (increases retirement ages to 67) — failed with only 1 in favor, 66 opposed
HB 1166, Amendment 1 (to increase employee contributions by 5%) — failed with only 3 in favor, 61 opposed
- Meaningless - Thursday, Feb 28, 13 @ 3:29 pm:
When will the discussion of increasing revenue (besides higher employee contributions) and reamortizing the pension debt ramp (Ralph Martire) be put on the table in a serious manner?
- funny guy - Thursday, Feb 28, 13 @ 3:30 pm:
They are basing the payback on a 30 year time horizon–which is not necessary–only to make it look worse than it is and justify more draconian measures. Mayor Daley’s Commission report used a 50 year time frame.
- Fiercely Independent - Thursday, Feb 28, 13 @ 3:31 pm:
Why isn’t there more discussion regarding the low rate of return that Illinois received on its investments last year? I believe it was somewhere around 1.4%. A quick Google search shows that Louisiana received a return of 14.3%. Wisconsin was in double digits, as was North and South Carolina.
- funny guy - Thursday, Feb 28, 13 @ 3:32 pm:
Sue in federal court based on a 5th amendment takings argument (and the state constitution)–keep it away from the Illinois Supreme Court
- 47th Ward - Thursday, Feb 28, 13 @ 4:16 pm:
These amendments are basically Ty Fahner’s plan to solve the pension issue. Since neither Tom Cross nor anyone else was willing to put that garbage into bill form, Madigan had to do the dirty work for them.
So we should be calling these the Fahner amendments. For a refresher:
http://www.sj-r.com/opinions/x13283701/Ty-Fahner-Pensions-can-and-must-be-reformed
Now maybe we can move on to some solutions that might win majorities.
- Katiedid - Thursday, Feb 28, 13 @ 4:30 pm:
Fiercely Independent - Those funds have a calendar year fiscal year, while the Illinois’ state funds’ fiscal year runs from July 1 to June 30. If you look at those other funds’ returns for calendar year 2011, they’re pretty flat, too.
- Fiercely Independent - Thursday, Feb 28, 13 @ 4:37 pm:
Thanks for clarifying, Katiedid.
- PublicServant - Thursday, Feb 28, 13 @ 4:48 pm:
Who were the legislators that voted for any one of the proposed amendments? We retirees have a lot of time on our hands, enough to actively volunteer/campaign against those unprincipled reprobates.
- wordslinger - Thursday, Feb 28, 13 @ 4:57 pm:
Still, 47, love the idea of making the Mushrooms take votes and explain them. Let your light shine!
The dirty little secret, for many years, is that any backroom dealing by Madigan was as much to protect GOP lawmakers as Dems. Madigan has been carrying Cross’ water for years, protecting his pals and making life easy for him with staff, office space, etc.
I’m sure the railrats of the “Third Chamber” don’t like this new development of transparency, but who cares? I’m not paying them. I think it’s awesome.
Put the issues on the floor, debate and vote. Sounds like democracy.
- 47th Ward - Thursday, Feb 28, 13 @ 5:02 pm:
===Sounds like democracy.===
Amen brother. More please.
- chuck - Thursday, Feb 28, 13 @ 5:15 pm:
WORDSLINGER-Where did you pick up mushrooms Miaron Kulas
- Just The Way It Is One - Thursday, Feb 28, 13 @ 7:14 pm:
Good to see Bipartisanship alive and well again. And the best thing is they’re all talkin’, and per J. Cullerton’s actions, open to some tinkerin’. In the long run, the short run signs are all good. Let’s keep this momentum goin’, Folks…
- I know labor - Friday, Mar 1, 13 @ 11:41 am:
-Kurtinspringfield-
I think you do make valid points in a previous post. It is certainly a gray area. If the numbers of 1and 2 percent are the correct negotiated numbers…. I don’t like it….it stings… But it is not devastating to me, and hopefully others. I must eat crow and agree… That yes, if we have pay, then having AFSCME and Henry Bayer negotiate is the best option.
- pensioner - Friday, Mar 1, 13 @ 1:49 pm:
Google Overview of Retiree Health Insurance Lawsuits July 26 2012 for Maag case. May be additional plaintiffs now.