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Another House pension reform advances

Thursday, Mar 21, 2013

* Sun-Times

The Illinois House voted Thursday to limit compounding annual cost-of-living increases for state retirees in a constitutionally questionable move targeting the largest driver of the state’s $97 billion pension crisis.

The Senate-bound measure, sponsored by House Speaker Michael Madigan (D-Chicago), passed the House on a 66-50 roll call and would affect current and retired state workers, university employees, legislators and downstate and suburban teachers. Judges weren’t included.

Under the measure, current and future public employees would have to wait until age 67 or five years after retirement to begin collecting retirement benefits. State employees'’ annual cost-of-living adjustments would be capped at the lesser of 3 percent or $750 per year. […]

The vote represents the third incremental pension-reform measure to pass the House, following votes last week to cap the size of pensions and raise retirement ages.

…Adding… My reading of the bill indicates that the shorthand used in the above story is wrong. COLAs can’t be collected until age 67, not pensions.

* Daily Herald

In a rare speech from the floor, Speaker Michael Madigan indicated today’s move, in addition to other measures the House approved last week, means lawmakers should be close to “finalizing” more comprehensive legislation.

But while most observers agree cutting annual pension increases would save the state the most money, the move is also among the most controversial. The Illinois Constitution states pension benefits are not to be “diminished.”

State Rep. Mike Fortner, a West Chicago Republican, was among those who raised legal questions in opposing the plan. […]

A proposal from state Rep. Tom Morrison, a Palatine Republican, that would move most public employees into 401k-style retirement plans is set for debate in a House committee later today. But it isn’t expected to be approved.

The roll call is here.

Republicans voting “No” were Reps. Bost, Brady, Brauer, Brown, Cavaletto, Davidsmeyer, Fortner, Hammond, Harms, Hays, McAuliffe, Meier, Bill Mitchell, Moffitt, Poe, Reboletti, Reis, Rosenthal, Sommer, Tryon and Unes.

Democrats voting “No” were Reps. Beiser, Cassidy, Costello, DeLuca, Drury, Dunkin, Evans, Fine, Ford, Hoffman, Jackson, Jakobsson, Lang, Lilly, Mautino, Mayfield, Phelps, Riley, Rita, Scherer, Sims, Smiddy, Smith, Thapedi, Turner, Verschoore, Welch and Williams.

- Posted by Rich Miller        

111 Comments
  1. - Captain Illini - Thursday, Mar 21, 13 @ 2:59 pm:

    Words can’t explain how legislation can be passed that is clearly against the Illinois Constitution…however, obfiscation comes to mind.


  2. - walkinfool - Thursday, Mar 21, 13 @ 3:01 pm:

    Grinding it out.

    This piecemeal approach might be the only way to finally get it all done. It’ll be interesting to see who votes for the parts, but then rejects the bill that combines the pieces.


  3. - Slick Willy - Thursday, Mar 21, 13 @ 3:02 pm:

    ***Under the measure, current and future public employees would have to wait until age 67 or five years after retirement to begin collecting retirement benefits.***

    Do these “retirement benefits” include pension payments?


  4. - Nearly Normal - Thursday, Mar 21, 13 @ 3:05 pm:

    Expect a suit if this becomes law. I see judges are not included.


  5. - 47th Ward - Thursday, Mar 21, 13 @ 3:08 pm:

    Captain, c’mon now. That kind of rhetoric is partly what is holding us back. I for one would like something, anything to pass as soon as possible in order to get the lawsuit underway as soon as possible.

    The paralysis over the constitutional question isn’t going away until the IL Supreme Court gets its say. That’s going to take a few years, so let’s give them something to get started on.


  6. - Rich Miller - Thursday, Mar 21, 13 @ 3:09 pm:

    === I see judges are not included.===

    They have extra constitutional protection.


  7. - Nearly Normal - Thursday, Mar 21, 13 @ 3:09 pm:

    Slick–the bill is about the COLA only. You get the pension but no increase until 67 or retired for five years. If one is already retired but has not reached 67 or retired for five years the COLA is frozen until that time and then follows this law.


  8. - Nearly Normal - Thursday, Mar 21, 13 @ 3:11 pm:

    Extra constitutional protection–sort of a pension condom?


  9. - Demoralized - Thursday, Mar 21, 13 @ 3:12 pm:

    ==They have extra constitutional protection. ==

    Ya. The fact that they get to say what it says.


  10. - Madison - Thursday, Mar 21, 13 @ 3:14 pm:

    These fools will run off and do something for the sake of saying they did…


  11. - Demoralized - Thursday, Mar 21, 13 @ 3:16 pm:

    @Nearly Normal:

    Is the article wrong? It says pension benefits can’t be collected until age 67. That’s more than dealing with the COLA only.


  12. - Billy - Thursday, Mar 21, 13 @ 3:17 pm:

    Hope state employees and retirees remember who votes for these bills. We never see a listing of the voting in the papers. I for one would like these vote results made public every time, so these politicians may face the rath of the voters come the next election, and not hide behind the media’s reluctance to publish the results of the politicians’ votes!


  13. - Demoralized - Thursday, Mar 21, 13 @ 3:21 pm:

    @Billy:

    It’s not hard to find.

    http://www.ilga.gov/legislation/votehistory/98/house/09800HB1165_03212013_004000T.pdf


  14. - Wrath of the Unions? - Thursday, Mar 21, 13 @ 3:23 pm:

    The Unions pumped in 8 million in 2010. It better all go into primaries or they look worse than useless
    All I hear is crickets so far


  15. - Skeeter - Thursday, Mar 21, 13 @ 3:24 pm:

    Madison,

    You may well be right, but we also have a lot of people who refuse to do anything at all, and that’s just as bad.

    The no votes in both the House and Senate — what are they proposing? If nothing, then I would hope they would find a new line of work since the current job includes solving this problem.


  16. - Fultonfarm - Thursday, Mar 21, 13 @ 3:25 pm:

    Anybody have any idea on the aspect of federal property rights laws- at least for those already retired.

    In other words, if the Illinois Supreme Court goes along with Madigan (since they are exempted)can it be appealed to the federal courts?


  17. - Wrath of the Unions? - Thursday, Mar 21, 13 @ 3:25 pm:

    I would add that was over a third of ALL major donor spending. The League of Conservation voters national total was 15 million in the last cycle.
    Almost none in Illinois races. Hope the dems can streach that unless the Union bosses betray their members as ususal


  18. - Niles Township - Thursday, Mar 21, 13 @ 3:31 pm:

    Hope state employees and retirees remember who votes for these bills. We never see a listing of the voting in the papers. I for one would like these vote results made public every time, so these politicians may face the rath of the voters come the next election, and not hide behind the media’s reluctance to publish the results of the politicians’ votes!
    ———————————

    Well, I certainly, but not the way you want. I’ll remember who voted for these bills (any decent pension reform) so I can support them with votes, with voice, with volunteering and with dollars.


  19. - titan - Thursday, Mar 21, 13 @ 3:33 pm:

    @ Nearly Normal - “Extra constitutional protection–sort of a pension condom?”

    As I understand it, the constitutional provision was the pension condom. Apparently more than one is needed to protect against the STD that is the GA.


  20. - Nearly Normal - Thursday, Mar 21, 13 @ 3:35 pm:

    Demoralized–Rich added a note to the above stating that the summary of the bill is wrong. I read the bill and Rich is right.


  21. - Nearly Normal - Thursday, Mar 21, 13 @ 3:37 pm:

    titan–I will say no more so that Rich doesn’t kick me off. Good analogy STD and the GA.


  22. - moonpath - Thursday, Mar 21, 13 @ 3:39 pm:

    Did anyone notice if the house bill that passed included language that anyone eligible for receiving social security would have their cola limited to the first $20,000 in pension income. That language was in an earlier version of this pension concept. Just curious. Thanks in advance


  23. - titan - Thursday, Mar 21, 13 @ 3:48 pm:

    HB1165 reminds me of Otter in Animal House:

    “I think that this situation absolutely requires a really futile and stupid gesture be done on somebody’s part!”


  24. - Nearly Normal - Thursday, Mar 21, 13 @ 3:50 pm:

    moonpath–I scanned the new language and did not see anything that mentioned any such provision. What passed was Amendment 6.


  25. - From the south - Thursday, Mar 21, 13 @ 3:55 pm:

    I see Rep Bradley voted against his own district to please the speaker…. Again!


  26. - archimedes - Thursday, Mar 21, 13 @ 3:56 pm:

    The judges have a consitutional protection against any diminshment of compensation while they are in office. There was a case already decided at the Illinois Supreme Court where the court found their pension was a part of their conpensation and could not be altered. That would be the reason to not include them - already tried and found wanting.
    Although, if police power is the authority for this change you could diminish them (depsite the additional protection)as well as the others with the same theory. My guess would be that the State would start out arguing the change is constitutional and fall back to police power if they lose on that. Still a long ways to go on this stuff.


  27. - Dana Heupel - Thursday, Mar 21, 13 @ 4:01 pm:

    For those looking for specifics on what is or isn’t involved, here is the bill that passed the House:
    http://www.ilga.gov/legislation/98/HB/PDF/09800HB1165lv.pdf
    Section 2 is General Assembly pension system; 14 is state employees; 15 is state university; 16 is teachers. (Changes in current law are underlined or struck through. The rest is language already in in current law.)


  28. - Hyperbolic Chamber - Thursday, Mar 21, 13 @ 4:04 pm:

    Crain’s (E-Mail) Headline: Illinois House passes pared-down pension plan

    Trib (E-Mail) Headline: Illinois House approves major pension reform bill


  29. - facts are stubborn things - Thursday, Mar 21, 13 @ 4:08 pm:

    I think the political calculation for many in the Ga is to pass something big on pension reform that is clearly not going to pass the SC, and then have the political cover that they tried and it is the SC that is now forcing them to raise other revenue etc. This is all noise and will end up in the courts and if there is any notion of law left…shot down.


  30. - C'mon - Thursday, Mar 21, 13 @ 4:10 pm:

    I would like to know what the pensions are for our legislatures and how much they and the judges pay for their health insurance. There you go- there is the pension money for the teacher that has worked 35 years, paid into the system, has to pay for their own health insurance in retirement etc.


  31. - RNUG - Thursday, Mar 21, 13 @ 4:16 pm:

    Read it; same old same old. Given previous court decisions, I see HB1165 as a non-starter.

    I did catch one bit of interesting language this time in the definitions that I may have missed in the past:

    (40 ILCS 5/15-107.2 new)

    Sec. 15-107.2. Tier I retiree. “Tier I retiree”: A former Tier I participant who is receiving a retirement annuity. A person does not become a Tier I retiree by virtue of receiving a reversionary, survivors, beneficiary, or disability annuity.

    —–

    So, since the changes are explicitly to only a tier 1 employee or tier 1 retiree, does this mean the COLA reduction does not apply to anyone except the actual retiree? Since I didn’t see any language striking out survivor rights, will survivors of a Tier 1 retiree get the full 3% on the full amount of the pension they are entitled to as a survivor?


  32. - RNUG Fan - Thursday, Mar 21, 13 @ 4:18 pm:

    SHhhhhhh RNUG


  33. - Arthur Andersen - Thursday, Mar 21, 13 @ 4:20 pm:

    C’mon-have you met the Google?

    Hyperbolic, nice catch on the headlines.


  34. - RNUG - Thursday, Mar 21, 13 @ 4:20 pm:

    C’mon

    It’s all on the web if you know where to look.

    You can find the pension rules in the varios handbooks. For judges and general assembly, start at the SRS web site, click through to the system, pick information, pick handbooks.

    You can look up the actual pensions being received several different places. Try either the SJ-R or the Open the Books web site. I can attest the OtB site is accurate on my pension. On OtB you can search by name or category; note, there are various categories so be sure to pick the correct one.


  35. - rusty618 - Thursday, Mar 21, 13 @ 4:21 pm:

    I think these bills are being done in piecemeal fashion so the ones that are not constitutional (like this COLA one) can be addressed separately, while the other ones can be passed through and signed off. Probably the best way to get anything accomplished.


  36. - Norseman - Thursday, Mar 21, 13 @ 4:24 pm:

    “=== I see judges are not included.===

    They have extra constitutional protection.”

    As does members of the GA.

    The constitution provides that judicial compensation can’t ‘be diminished to take effect during their terms of office.’

    While the constitution states that ‘changes in the salary of a member (legislator) shall not take effect during the term for which he has been elected.’

    The effect is that neither judges or legislators salaries can be changed during their terms.

    This judicial exclusion is all about trying to avoid upsetting the arbiters of the law’s legality.

    Politically, the GA would be crucified if they excluded themselves on the same basis that they have extra protection.


  37. - Hyperbolic Chamber - Thursday, Mar 21, 13 @ 4:26 pm:

    @ Wrath of the Unions? - “All I hear is crickets so far”…”unless the union bosses betray their members as usual…”

    Are you suggesting that the unions haven’t been representing their members in this debate? I don’t know where you’ve been, but I recall expensive media campaigns and 24/7 lobbying efforts all on the subject of… (wait for it)… PENSIONS!

    If you are trying to propagate some right-wing talking points on how workers don’t get anything for their union dues you should check your facts and re-read your anti-union manual.

    (My apologies in advance, Rich, if this was a “drive-by” comment. I’m not sure I know the definition.)


  38. - crossface - Thursday, Mar 21, 13 @ 4:29 pm:

    If this bill passes and a lawsuit is filed, what happens while the Supreme Court listens? Are COLA benefits going to be paid. What happens to one who has retired for 5 years and is 18 months away from receiving retroactive COLA since age 55? Will they receive what has already been earned


  39. - RNUG - Thursday, Mar 21, 13 @ 4:31 pm:

    R fan,

    Hey, I’m interested b/c most of the income the Mrs will have is my State survivor’s benefit. Based on family history, I expect the Mrs to outlive me, even though she’s older and the tables say we have about the same number of years left. But I’ve planned for her to survive me.

    And if I get forced to make a choice, I’ll go for the current COLA and pay what I have to for insurance for both her and I until we reach Medicare. She gets more upset about this stuff than I do; like I told her the other day, there’s enough in our IRAs to pay full freight for insurance if we have to.

    If it gets so bad in the future we can’t do it, then I’ll just follow the state plan … keep helping my kids and grandkids with money but default on unsecured debt … LOL


  40. - Billy - Thursday, Mar 21, 13 @ 4:35 pm:

    Crossface do not count on receiving your retroactive Cola! We may all be in Limbo for a long time, till the senate and house reach an agreement on a bill, and the Supreme Court hears the case. Till them make your state politicians life hell, by calling and emailing them, and telling them what you think!


  41. - Mouthy - Thursday, Mar 21, 13 @ 4:36 pm:

    I read the new provisions and saw nothing that changed the COLA from compounding to non compounding each year. Did I miss something?


  42. - crossface - Thursday, Mar 21, 13 @ 4:39 pm:

    Believe me, I have been!! I was just wondering while this appeal is being considered what will happen??? It would make more sense to come up with a solution that meets the constitutional muster. That would mean the unions and legialture working together for the better of Illinois.


  43. - RNUG - Thursday, Mar 21, 13 @ 4:39 pm:

    C’mon @4:32pm,

    You’re just popping drive-by comments. Let’s see you back them up with some numbers and logic.

    If you look at the numbers, the judges and GA (JRS & GARS) are such a small part of the problem they aren’t even a rounding error. For example, I figured the other days that if you seized all the assets in GARS and redistributed to the other funds, it would pay about 2 - 3 weeks of interest on the pension debt.

    So you’ve done that and bought a few weeks time. Now what are you going to do?


  44. - RNUG - Thursday, Mar 21, 13 @ 4:48 pm:

    Mouthy @ 4:36 pm:

    With the COLA only applying to the first either $20K (SS) or $25K (non-SS), it doesn’t really matter very much. Once you reach those numbers, any compounding on the increase stops and your pension will be a fixed increase over the previous year by $600 or $750.


  45. - Administrators /superintendents??? - Thursday, Mar 21, 13 @ 4:53 pm:

    Do you remember the big headlines of the administrators already retired and making over $200,000 a year in a new job while collecting a 6 figure retirement income. Wow… Did you know none of these reforms include them. But, I guess, as RNUG references above… there is not much money there as the numbers are to small to make a difference. So, let’s just leave them alone, too. Just saying…


  46. - Grandson of Man - Thursday, Mar 21, 13 @ 4:55 pm:

    …Adding… My reading of the bill indicates that “the shorthand used in the above story is wrong. COLAs can’t be collected until age 67, not pensions.”

    Whew! That scared the heck out of me for a second. Thanks for the clarification.

    “The vote represents the third incremental pension-reform measure to pass the House, following votes last week to cap the size of pensions and raise retirement ages.”

    I’m not sure what this is. I didn’t know this part of reform already passed the House. Sorry I missed this, but I’ll go try and dig it out. It sounds somewhat contradictory to what passed in the House today.


  47. - fedup - Thursday, Mar 21, 13 @ 4:56 pm:

    For single people who do not have another source of retirement income including no Social Security, this is devastating. They have literally stolen a huge portion of life savings from these people. If inflation increases as the economy comes back, they will be further impoverished with every year.


  48. - RNUG - Thursday, Mar 21, 13 @ 5:03 pm:

    Administrators /superintendents???

    Two points:

    1) You can take what the GA gets away, but it isn’t even a drop in the bucket. If you’re trying to fill the bucket, one drop doesn’t matter … other than as a political symbol.

    2) Yes, there are some people getting that kind of money. A lot of those people are in SURS or TRS. Yes, some judges and legislatures get some big bucks. But it’s not necessarily who you think it is. Even people like former Govs are a ways down the list. Spend some time going through the highest pensions on one of the web sites. I doubt you will recognize most those names; I sure didn’t and I’ve been around State government for 40+ years. I had to do a bit of checking to find out who they were / what they used to do.


  49. - Arthur Andersen - Thursday, Mar 21, 13 @ 5:09 pm:

    Admin/Super-what reform would you propose to solve this problem of which you speak?


  50. - TiredofMike - Thursday, Mar 21, 13 @ 5:10 pm:

    When the compounding COLA was approved…I wonder what justification and cost projections were given?

    Why propose bills that are NOT constitutional? Just seems to be a waste of time and money — again.


  51. - pensioner - Thursday, Mar 21, 13 @ 5:11 pm:

    All current proposals all hat, no cattle. Is no there there. Blatantly unconstitutional.


  52. - Facts are stubborn things - Thursday, Mar 21, 13 @ 5:12 pm:

    Fed up

    The good news is nothing has really happened yet. This road has many more turns make. Your point is still very accurate if at the end of the day this cola reduction would become law and be upheld by the courts.


  53. - Facts are stubborn things - Thursday, Mar 21, 13 @ 5:12 pm:

    Fed up

    The good news is nothing has really happened yet. This road has many more turns make. Your point is still very accurate if at the end of the day this cola reduction would become law and be upheld by the courts.


  54. - cod - Thursday, Mar 21, 13 @ 5:13 pm:

    Anyone, politician or commenter, supporting this reneging of pension contracts is, on that principal, supporting the idea of not honoring social security promises, not honoring promises of medicare, and not honoring promises for pensions of private employees whenever an employer decides he doesnt want to pay. In fact, why pay into 401-K plans at all, if the labor market is flooded with teachers and government workers rejecting government jobs that dont pay them what was promised. A very sad situation for everyone except the very rich executives of the Commercial Club.

    And that is exactly the long term strategic plan of groups like the Commercial Club and it’s misnamed Civic Committee to reduce the incomes of the middle class and increase the wealth going into their own pockets.


  55. - RNUG - Thursday, Mar 21, 13 @ 5:13 pm:

    fedup

    The irony in all this is, if the GA succeeds in taking away the health insurance and COLA and impoverishing the retirees to the point where they end up under the federal/state income thresholds for welfare, it will still be the government’s problem; only now the retiree will be applying for LINK, section 8 assistance, utility assistance, an Obama cell phone, Medicaid, etc. In the end the few taxpayers, both state and federal, that are still working will end up having to pay the bill … it just won’t be labeled ‘pensions’.


  56. - Anonymous - Thursday, Mar 21, 13 @ 5:22 pm:

    When will the COLA reduction take place? After the bill is passed or after the Supreme Court hears and rules on the certain appeal.


  57. - Administrators /superintendents??? - Thursday, Mar 21, 13 @ 5:24 pm:

    It’s about fairness… No one is saying let’s exempt everyone from these reforms, except superintendents or the GA. What I think most would agree is…. Everyone get’s treated the same!!! Using your logic RNUG; we could exempt all agency chief’s of staff… After all the numbers are not a drop in the bucket. But, most would agree, that wouldn’t be fair. The GA is included! My question is why are the administrators and superintendent not included??? There is a reason. And “a drop in the bucket” is not it!


  58. - unbiased observer - Thursday, Mar 21, 13 @ 5:31 pm:

    none of these pension reform measures “take away” pensions or healthcare. they certainly diminish them, but they dont take them away.

    if some of these changes arent made the state will not be able to continue the pension program within a surprisingly short amount of time.


  59. - unbiased observer - Thursday, Mar 21, 13 @ 5:38 pm:

    it doesnt feel like it by reading the posts on this website, but there will be a great deal of support for these changes statewide. many non state workers will be perceiving this as a slight to moderate reduction in the pension benefit programs, being done as a last resort to keep the state out of insolvency. remember there are way more voters out there who do not benefit from state pension than do benefit, although to date they have not been as organized.

    public awareness on this issue is really starting to blossom though, people are starting to talk about this stuff around the dinner table, at restaurants, etc.

    im not sayin this to strike a nerve with the stateworkers, i just hope they realize the political realities they are up against, and i think it is risky for the stateworkers to rely upon the unconstitutional arguments, it sort of prevents them from having an active seat at the bargaining table which is where they belong.

    we need compassionate, intelligent, well informed adults to sit down and hash this thing out with the interests of the entire state taken to heart. peoples live are really going to be affected by this. we all will share some pain in this if we want to get out of this mess.


  60. - RNUG Fan - Thursday, Mar 21, 13 @ 5:38 pm:

    RNUG
    In my case its Mrs RNUG fan who is trying to get her 30 before disability stops her!
    Here is an idea for you and her on health care….she is Medicare eleigible but not Soc Sec eligible BUT If she or you are denied disability even though you physically qualify Could nt you both get the medicare early?


  61. - RNUG - Thursday, Mar 21, 13 @ 5:40 pm:

    Administrators /superintendents???

    I’m not arguing to exclude one group or another; they all should be included if there is something that can be legally changed. My comment at 4:39 was in response to one that has since been removed. To summarize, it said let’s take the GARS money & benefits away, give to everybody else, problem solved. The point I was making is you can do it, but mathematically it doesn’t matter. To be specific, GARS has something like $53M in assets; that isn’t much of a payment on a $96B ($96,000M) debt … something like 0.005%.


  62. - T.O. - Thursday, Mar 21, 13 @ 5:48 pm:

    Unbiased,
    Have you just been turned on to this issue? The unions have been trying to be involved. They get rebuffed at every turn. And the political realities are tied to the constitutional protections. If the pension clause did not exist neither would this discussion. The GA and governor would have slashed the pensions years ago.


  63. - Anonymous - Thursday, Mar 21, 13 @ 5:52 pm:

    Unbiased observer. Let’s take a slight moderate reduction from all Illinois employees to pay down the pension debt


  64. - RNUG - Thursday, Mar 21, 13 @ 6:04 pm:

    R fan,

    We’ll be fine. The Mrs is already receiving SS on her own earnings and will be Medicare eligible in less than a year. I’m also SS eligible and about 5 years away from Medicare but in good enough health I should be able to get a high deductible plan and pay the annual Dr visit out of pocket. I already pay my drugs mostly out of pocket because I don’t hit the yearly deductible until the end of the year. You can be sure I’ll have any expensive preventive procedures done before I drop off the current policy.


  65. - RNUG Fan - Thursday, Mar 21, 13 @ 6:05 pm:

    Here is your dog story break. NBC reports a that one dog acted as a seeing eye dog for another stray …Out of California….Far more loyality than Humans
    So back to…
    I have been checking mine and the other union sites…
    Here is an intereting tidbit
    29 Dems and 4 repubs who got IFT endorsements voted for this farce. Comments to say the least are non plussed
    Dont have IEA or AFSCME acess or Info


  66. - C'mon - Thursday, Mar 21, 13 @ 6:09 pm:

    You are not just talking about judges, etc, but their families in regards to health care PLUS school administrators etc. if Everyone had to pay into their healthcare, that would not be a little drop in the bucket. Some school districts pay their retired teacher’s health care in retirement. Everyone should be paying into it and that would give some needed income to pensions.


  67. - RNUG Fan - Thursday, Mar 21, 13 @ 6:11 pm:

    RNUG Yes COLA absolutly because there is no Health guaruntee with this thing. You can get the same plan from the exchanges ….IEA is wondering what about TRIP isnt that a like contract…It is and i really think Charlies is too..That ruling focused entrirely on Pension almost like he was expecting a future case


  68. - fedup - Thursday, Mar 21, 13 @ 6:17 pm:

    “Unbiased,” let me see. So, employees should just give up all of their pension money because popular opinion (not by polls but what you overhear) thinks it’d be way more convenient if the State just didn’t pay. Are you hectoring companies to just eat the bills for money owed by the State? Why not use public opinion instead of the law or contracts to decide whether to pay corporations?


  69. - unbiased observer - Thursday, Mar 21, 13 @ 6:20 pm:

    fed up

    corporations and schools are already not being paid as promised


  70. - Confused - Thursday, Mar 21, 13 @ 6:25 pm:

    Fedup, you said it. So, these pension cuts are about 35% of my retirement security. So, where is the legislation that pays 65 cents to the dollar that the state owes to its vendors? Can someone explain the difference? The state owes me and the state owes its vendors. Why am I the only one being apologized too?


  71. - pensioner - Thursday, Mar 21, 13 @ 6:25 pm:

    @fedup @6:17 pm…. Agreed.


  72. - RNUG - Thursday, Mar 21, 13 @ 6:29 pm:

    corportions get paid interest at a better rate than you can find today; they also eventually get the full bill paid.

    schools may or may not get their full amount eventually.


  73. - Confused - Thursday, Mar 21, 13 @ 6:35 pm:

    So RNUG, do you agree that corporations should be paid 65 cents to the dollar just like the Sen. Biss and Rep. Nekritz of the legislature think state employees think they should?


  74. - crossface - Thursday, Mar 21, 13 @ 6:37 pm:

    I would still like an answer or an opinion. If the COLA is reduced, what happens while this is under appeal by the supreme court. It could take years to resolve. COLA payments frozen or business as usual until Supreme Court decides


  75. - RNUG Fan - Thursday, Mar 21, 13 @ 6:41 pm:

    Confused You are right The state could legally put out an offer like that take 65 now or wait
    In fact they did that with the nrusing home operators in Medicaid. Another example and why I am a fan of RNUG and AA because it makes the police powers claim look silly
    Of course this COLA got voted down in Senate and House could have voted on Senate so …

    I notice Rich Posted the opinion and Vote of one thoughtful GA member-Fortner(maybe he will post on this) and I see he was a no. He takes his job seriouly like Mrs R Fan who refused to interrupt her work to listen to my rants
    Unions just reacted to all this with simple statement


  76. - RNUG Fan - Thursday, Mar 21, 13 @ 6:45 pm:

    Crossface Cant say much detail but Likely injunction here. Clear likelhood of win on anything to do with annuity and high degree of harm.
    Probably same on Seante at least with regard for annuity maybe not health …well maybe because of severability


  77. - crossface - Thursday, Mar 21, 13 @ 6:51 pm:

    I am 59 and won’t get any COLA increase until January after my 61st birthday. Wondering if I would get any of that already earned retroactively if the COLA freeze takes place.


  78. - RNUG Fan - Thursday, Mar 21, 13 @ 6:54 pm:

    I would add Colorado which does not have the Consitution like us and AZ had a local judge rule COLA was gift but rest of annuity was contract An appeals court said WHOLE thing is contract
    I would add Florida supreme court overturned an appeals court that said it was a contract. Fl supremes said no it was set up as gift. I think witnessed by no payment required. FL started requiring payment
    NONE of that matters to a state that starts off with this IS A CONTRACT

    All this is a long way of saying Colorado a state that didnt clearly define their COLA found this and here as just implied in a ruling if its calcuable and annuity like its in a protected zone . The “COLA” is just that


  79. - cassandra - Thursday, Mar 21, 13 @ 6:57 pm:

    I still believe that cola reductions are unconstitutional. I also assume that if a bill reducing cola passes, a lawsuit will be filed and the plaintiffs will seek an injunction prohibiting any reductions until the judges make their decision.

    Will the Quinn admin go ahead and alter the amounts they pay into the pension system despite the uncertainty. And what will the legislators do with the “extra” money if they pay in less. Could seem like windfall.


  80. - redleg - Thursday, Mar 21, 13 @ 7:02 pm:

    Crossface, maybe give whichever system you’re in a call about your retroactivity question? I would bet they’ve been asked a bunch of times already.


  81. - Unbiased observer - Thursday, Mar 21, 13 @ 7:04 pm:

    Illinois is in much worse shape than other states mentioned…..there are different political forces at work.

    It doesn’t matter what supreme courts of other states think about Illinois law last time I checked.


  82. - crossface - Thursday, Mar 21, 13 @ 7:04 pm:

    I am in TRS


  83. - Harry Wasko - Thursday, Mar 21, 13 @ 7:06 pm:

    unbiased observer: I receive $887.00 a month. I`m small potatoes but just how much do you want me to give back anyway? I get sick and tired of you talking about giving up. Also I have talked to lots of folks in my area and they think this is all a crock. You are not an unbiased observer at all. You won`t be happy till we all lose what we have. Have a nice day, not.


  84. - crossface - Thursday, Mar 21, 13 @ 7:08 pm:

    Instead of robbing all state employees of 35% of their retirement security, lets just take 10% from everyone’s retirement, SS, 401K, etc.. Seems fair. Why punish only the state employees. We paid in our share


  85. - Unbiased observer - Thursday, Mar 21, 13 @ 7:09 pm:

    Harry, I don’t think you should lose any of your pension. I hope you believe that because I really mean it.


  86. - Harry Wasko - Thursday, Mar 21, 13 @ 7:34 pm:

    Unbiased: As a man who tries to live an honest life I guess I was out of line. I regret what I said as I don`t know you and I shouldn`t have said it.
    I had a very good paying job in a chemical plant and it closed because of stupid managment. At an advanced age I was able to get a maintenance (lower paying job) in a University. Only reason I was able to get it at an advanced age was of being a veteran.
    Anyway, I know something has to be done but am just sick and tired of the daily turmoil. Thanks for listening.


  87. - RNUG Fan - Thursday, Mar 21, 13 @ 7:47 pm:

    Well Harry you should have some SS so thye want to punish you more….
    Unbiased stat after stat has been posted on the state tax comparisons of Illinois and its neigbors like IA and MN and its Peers like NY and CA -Illinois is a bargain for teh top 1 or even 10 percent

    I really admire the Republican defectors My guess is thye know the civic club is a bag of hot air and sised with their teachers and state workers over the plutocracy that blew Harrys plant


  88. - Arthur Andersen - Thursday, Mar 21, 13 @ 8:35 pm:

    crossface, the answer to your question, unfortunately, is “it depends.” The final language of any COLA/AAI freeze statute combined with any action taken by a court will determine what happens with yours and all TRSers’ COLAs.


  89. - Mama - Thursday, Mar 21, 13 @ 8:35 pm:

    Can they force a person wait until he is 67 to retire as stated in HB1165?


  90. - RNUG Fan - Thursday, Mar 21, 13 @ 8:47 pm:

    Mama That one only gets you in one of the house bills and only if you are guilty of being too young
    unions are announcing a call into ask vendoers to take 65% too……Focused on Biss and Nekritz
    Anyone want to run for state sentae or house I think I know some people with a few million dollars to spend ….


  91. - pensioner - Thursday, Mar 21, 13 @ 9:01 pm:

    @ Unbiased observer - Thursday, Mar 21, 13 @ 7:04 pm: It matters very much what other SCs have stated in similar cases, as that is the case law on which a decision is based. Nardulli based his recent decision on a NY SC case.


  92. - RNUG - Thursday, Mar 21, 13 @ 9:26 pm:

    Confused @ 6:35 pm:

    No, I believe everyone should be paid what they are owed.


  93. - Norseman - Thursday, Mar 21, 13 @ 9:28 pm:

    Self-anointed unbiased observer, please try explaining the rational of your posts. Your comments do not reflect any attempt to read the information provided by other posters.

    Among your latest goodies is that “none of these pension reform measures ‘take away’ pensions or healthcare. they certainly diminish them, but they don’t take them away.” Because the post was focused on one house measure, I have to assume your reference to “these” refers to all the proposals to date. If you had reviewed just a couple of the previous posts you will note that Cullerton’s proposal provides for the loss of healthcare benefits if the employee or retiree refuses to accept reductions in their pensions.

    I also have to question the basis for your statement “if some of these changes aren’t made the state will not be able to continue the pension program within a surprisingly short amount of time.” In my humble opinion, this is hype from the Fahner types to convince gullible state employees and retirees that if they don’t agree to changes, they won’t have a pension. To buy the scenario that no pension annuities will be paid at some point in the near future, you have to totally ignore the Illinois Constitution, state court rulings related to the payment of pensions and federal contract law.

    Pension reduction (this is not reform) has been a hard issue for the General Assembly because of the constitutional diminishment provision. If the constitutionality of simple reductions are of such a concern, there can be no greater violation of the diminishment clause than to NOT pay ANY annuities. Not only would the state face suits in state courts relating to the stoppage of payments, it would also face federal contract lawsuits. Do you really think that the GA would fund the judges pension annuities to get a favorable court ruling, while leaving retirees in the GARS, SERS, SURS and TRS systems with nothing?

    As has been referenced a number of times in this blog, courts have ruled that the state is not obligated under the constitution to pay a set amount of money to the pension funds, but it is obligated to pay the benefits to the retirees. While this would drive the CPA types and the rating agencies nuts, the meaning is that the state could revert to a pay as you go funder of benefits - simply pay an amount to cover the annuities owed for the fiscal year.

    To further accept the idea that the money would dry up, you have to believe there is no remedy through the courts to address the non-appropriation of funds for annuitants. The courts have shown in at least one case - the judge COLA case - the willingness and capability of forcing the state to pay a judgment.
    Assuming that all legal logic leaves our judiciary, worst case estimates provided to TRS - the system with the highest unfunded liability - by a consulting firm, forecasted that their fund would NOT run out of money until 2029. More rosy scenarios show the fund running out in 2037 and 2049.

    I know there is a problem. I disagree as to whether retirees and employees have to pay for this problem, based on my interpretation of the constitution and court cases. You have a right to disagree, but have the courtesy of explaining the basis for your pronouncements and “facts.”


  94. - unbiased observer - Thursday, Mar 21, 13 @ 9:49 pm:

    in 2018 unless changes are made, over 30% of annual budget will be going toward pension payments. regardless of what your stance is on pension reform i think we can all agree that this is way too high a percentage and cannot be sustained. further the percentage will grow rapidly on an annual basis.


  95. - pensioner - Thursday, Mar 21, 13 @ 9:55 pm:

    @ Unbiased observer - Thursday, Mar 21, 13 @ 9:49 pm: Revenue!


  96. - RNUG Fan - Thursday, Mar 21, 13 @ 10:08 pm:

    Not the only thing I would like to see but………..

    FYI
    Some late news tonight from UPI unedited

    Highlights

    University Professionals of Illinois shared Save Our Pensions’s status.

    about an hour ago.

    We must continue to fight the good fight! Please take a few minutes tomorrow and call your state senator and representative. WE WILL NOT BACK DOWN!!!

    We have been in this battle with for the last 4+ years. This week was very frustrating. They want to divide us; they want us to turn on each other. I say, NO!

    I am ready and willing to fight! I am not going to turn on my colleagues and friends; I am not ready to accept a compromise that hurts us. We paid our fair share.

    We are calling on everyone, tomorrow, to call your state senator and representative. Ask them if they would support legislation that would pay the state’s vendors 65 cents to the dollar as they are asking us to accept for our pensions. Why is their debt to us any different than their debt to the state’s vendors?

    We are tired of their apologies as they vote against our retirement security. We are tired of their apologies as they ask us to accept 65 cents to the dollar. We paid our fair share; they did not. Let’s call them on it.

    Share this message and lets take the struggle to them. Call Sen. Biss (217-782-2119)! Call Rep. Nekritz (217-558-1004)! Call your State Representative and Senator if they voted to support any of the unconstitutional and unfair bills that cut our pensions. Ask them where is their legislation is to cut the payments to the state vendors!

    The time is now! It is up to us to send the message that their apologizes are not accepted!

    Call them and tell them that their apology is not accepted!


  97. - Norseman - Thursday, Mar 21, 13 @ 10:08 pm:

    Agreeing there’s a problem has not been the issue. It’s all about the proposals to solve that problem. I prefer Martire’s plan and think the Fortner plan shows promise.


  98. - Ready To Get Out - Thursday, Mar 21, 13 @ 10:08 pm:

    @ Unbiased observer - over 30% in 2018? Exactly how do you know that? Details please.


  99. - pensioner - Thursday, Mar 21, 13 @ 10:16 pm:

    @Norseman - Thursday, Mar 21, 13 @ 10:08 pm:
    Aware of Martire, not of Fortner. Do you have a link? Thanks


  100. - RNUG - Thursday, Mar 21, 13 @ 10:24 pm:

    Ready to Get Out,

    I believe you can arrive at the 30% number by taking the current 1995 ramp schedule and projecting it while you also assume the current 2% temp tax ends as scheduled and only moderate revenue growth. That’s how COGFA would project it, because they use the rules in place … and right now the temp tax is scheduled to end. Keep the 2% in place, and the percentage stays around where it is now … not good, but not 30%.


  101. - RNUG Fan - Thursday, Mar 21, 13 @ 10:26 pm:

    Fortner has posted here before to explain his ideas…..But he and Martire(who was in Macomb last week) have ideas and are thoughtful. After this week we can see there is no interest in that in Springfield


  102. - Norseman - Thursday, Mar 21, 13 @ 10:27 pm:

    Pensioner,

    Following is the link to the bill that I’ve heard discussed at the Retired State Employees Association meeting.

    http://www.ilga.gov/legislation/BillStatus.asp?DocTypeID=HB&DocNum=2365&GAID=12&SessionID=85&LegID=74147


  103. - Norseman - Thursday, Mar 21, 13 @ 10:32 pm:

    Pensioner, if you go to Fortner’s bill listing he has a few other pension bills listed. Haven’t bothered reviewing since the powers that be want to soak the retirees for more money and won’t give Fortner the time of day.


  104. - RNUG - Thursday, Mar 21, 13 @ 10:40 pm:

    Norseman,

    Didn’t realize you go to RSEA also. RNUG was the guy up in the left corner asking lots of questions last month. See Don Craven is currently scheduled to speak on Maag next week at RSEA. Should be an interesting session if he still comes and can speak freely; just worried he may not be able to because of persuing an appeal.


  105. - Ready To Get Out - Thursday, Mar 21, 13 @ 10:50 pm:

    Thanks for the reference on the RSEA. As I will soon be eligible for membership, I’ll remember to check them out when I sign the papers. I see the current president used to be my alderman.


  106. - Norseman - Thursday, Mar 21, 13 @ 11:11 pm:

    I was the big mouth guy in the back - Fortner’s left. Missed last month. Hope I can make it next week.


  107. - RNUG - Thursday, Mar 21, 13 @ 11:21 pm:

    Norseman,

    I’m usually in the same place near the door so I can skip out to the restroom as needed … darn diaretic pills.


  108. - Lookingforajob - Friday, Mar 22, 13 @ 7:23 am:

    According to Martire, this legislation will not change the fact that in 3-8 years, the pension ramp will be such, that the state will have to pay back huge chunks of money. I keep hearing shared sacrifice, but who is sharing in a public worker’s sacrifice here? Embezzling worker funds, then convincing the public it is their fault and making them pay it back. If the GA were regular citizens, they would be thrown in jail.


  109. - Arthur Andersen - Friday, Mar 22, 13 @ 7:57 am:

    RNUG, where is that meeting being held?


  110. - RNUG - Friday, Mar 22, 13 @ 8:07 am:

    AA,

    St. John’s Lutheran Church
    Family Life Center
    2477 W, Washington St.
    Springfield, Illinois

    March 27, 2013 – 1:30pm

    Lawsuit - Maag vs. Quinn; Health Insurance Premiums
    Attorney, Don Craven

    You’ll want to get there a bit early because they have you sign in, partly to try to sign up new members. Meetings are scheduled to last from 1:30 to 3:00

    Here’s their web site: http://rsea4u.org/


  111. - RNUG - Friday, Mar 22, 13 @ 8:37 am:

    Lookingforajob @ 7:23am,

    There are no magic beans to avoid the debt; the closest thing to that is stealing all or part of the COLA. Any reduction of the COLA immediately reduces the unfunded liability going forward, which is why there is so much effort to do so.

    One way or the other, the money has to be paid back and it is a huge sum. The payments are large regardless of the program. You wouldn’t know it from the dire predictions, but we are through the worst of the ramp; it will still grow from now on but relatively slowly compared to the past. The big problem with the ramp is the payments do still continue to grow. Other plans, such as Martire, have an immediate jump of another $1.9B or so to a payment that would be flat. I should probably note that in a few years, the payments on the ramp will equal or exceed the flat plans.

    BTW: if you are seriously looking for a non-state job and currently a employee in one of the 5 systems with at least 8 years in, don’t automatically plan to take your money out of the retirement system when you quit. Since you only get your contributions back, it’s not a good deal. I would suggest waiting to make that decision until all this shakes out; at that point you should know if that money will give you a reasonable benefit years down the road.

    And if you are in a 457 deferred comp plan, definitely don’t be in a hurry to move that money somewhere else. 457’s have one unique feature no other IRA type plan has: once you leave government service and are in the private sector, you can withdraw the money at any time / any age with no penalty, you just have to pay normal income tax on it. It makes a great nest-egg for the future should you ever have such a dire emergency you need it. Or it can be a fund to later help you transition from work to retirement at an age younger than SS eligibility.


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