79 Comments - roscoe tom - Tuesday, Apr 16, 13 @ 9:10 am: The longer the wait the greater the uncertainty. Take a case to the court with good attorneys on both sides and get it over with on all points. It is like suspecting a cancerous growth. The only certainty occurs when it is tested and the path to dealing with it becomes clearer. - David Ormsby - Tuesday, Apr 16, 13 @ 9:11 am: The court opinion illustrates the extent to which the prominent pension reformers have recklessly or willfully ignored the legal dimension of the problem. - Nickypiii - Tuesday, Apr 16, 13 @ 9:19 am: Once again the only possible reason for these attempts to blame the problem on workers and retirees is for political cover! “Look we passed this and this…and the Court shot us down!” The 2014 re-election mantra is created if they pass one of these obviously unconstitutional bills. REVENUE collected is 20+ years behind and needs to be increased…NOW! - Dewey Dilligent - Tuesday, Apr 16, 13 @ 9:26 am: If economic reasons do not, what(if any) principle of law does allow the State to suspend constitutional requirements? Also, is there any polling on the likelihood of a constitutional convention? Or is there any movement on this? - PublicServant - Tuesday, Apr 16, 13 @ 9:34 am: Queue the commenters with the crystal ball to explain how “reality” will force the courts to disregard the constitution, and uphold those laws being passed by the legislature that is “totally controlled” by the unions… in 3…2…1 - Rich Miller - Tuesday, Apr 16, 13 @ 9:35 am: ===is there any polling on the likelihood of a constitutional convention?=== That ain’t gonna happen. Voters overwhelmingly rejected that proposal a few years ago. So, voters clearly supported the Constitution as written when given a choice. - PublicServant - Tuesday, Apr 16, 13 @ 9:36 am: Sorry. Meant “cue” above. - Frenchie Mendoza - Tuesday, Apr 16, 13 @ 9:37 am: — If economic reasons do not, what(if any) principle of law does allow the State to suspend constitutional requirements? — Um, what? What’s the point of a state *constitution* if its requirements can be suspended? I would think — and I’m certainly no legal scholar — that any weakening of *any* constitutional requirements by political (or essentially politically motivated economic reasons) is disastrous — economically disastrous and certainly politically disastrous. If our politicians agree to uphold the constitution — then that’s what they have to do — uphold it, not attempt to weaken it or attempt to suspend parts of it when it politically expedient. Honestly, I’m a bit rattled that we (in the royal “we”) sense are going down this path of well, we can’t afford it — so lets nullify it. I said this last week, but this is Romney-esque “business” thinking — the same “I like to fire people” thinking that made Romney so over-the-top bizarre — that’s actually “bad business” thinking in disguise. These guys — Rauner, Romney — they’re not particularly good problem solver. They’re slash-and-burners — and then they pretend that, well, that’s how business works. That may be how modern business works — and how modern business CEOs make their money — but at some point the slashing and burning has to stop. One would hope that the constitution (certainly in this case) is exactly what will stop this. I mean, if the constitution can’t stop it — then nothing can. Moreover, I’d think that savvy business folks would be quaking if we’re heading down the “let’s just change the constituion” path. It would seem to me — again, no expert — that this could conceivably lead to, okay, we’re not going to pay what we owe to our vendors either. I mean, if retirees get their pension slashed — so, too, will the vendors. The fact that anybody is *for* this — suspending or diluting the clear language of the state constitution — seems to be an incredibly dangerous path for the state — and for all the so-called “business” folks eager to punish the state workers. - Mason born - Tuesday, Apr 16, 13 @ 9:39 am: Rich Any movement towards an amendment repealing the language? I thought someone had something already drafted. I can see that becoming a recurrent theme every election until it passes. Not passing judgement on whether it should or shouldn’t but i think eventually it will get pushed through. If i was a State Pension recipient i would be estatic that Quinn has proved so inept at messaging. - Rich Miller - Tuesday, Apr 16, 13 @ 9:41 am: ===Any movement towards an amendment repealing the language?=== That wouldn’t impact current employees/retirees. - Mason born - Tuesday, Apr 16, 13 @ 9:42 am: Frenchie While i disagree with your scree against business. I Completely agree on the dangerous point of nullifying the Constitution because the State has spent itself into a corner. Seems to be a very dark road to go down. - Mason born - Tuesday, Apr 16, 13 @ 9:43 am: Rich I agree but am surprised ti isn’t being proposed anyway. - dupage dan - Tuesday, Apr 16, 13 @ 9:44 am: It can be said it is not hard to predict the future when we’re talking about politicians, Rich. However, it is interesting to note that, during the convention, those present agreed to that strong language. A rare moment where “the better angels of our nature” prevailed. - He Makes Ryan Look Like A Saint - Tuesday, Apr 16, 13 @ 9:48 am: From a lay perspective, I think the framers of the constisution put this in to prevent the legislature from ignoring the pension system. Had they not put it in, they could not pay, force it into insolvancy and eliminate it entirely. It was fortelling the future. New Programs were made from the money that was suppose to go to pensions. The reformers are going to have a tough time - Oswego Willy - Tuesday, Apr 16, 13 @ 9:48 am: ===One thing we cannot do, however, is ignore the Constitution of Illinois.=== I will be very interested in Bruce Rauner’s thoughts, very specifically on THAT sentence. While Rauner thinks Illinois is Wisconsin or Indiana, that pesky Illinois Constituton, along with majorities in the House and Senate, today, being Democrats, where o’ where does shutting the state down and crashing the pension system fit with that simple sentence … ===One thing we cannot do, however, is ignore the Constitution of Illinois.=== If it was so easy, Mr. Rauner, as you say, wouldn’t someone (Rod? other governors?) have done that already? Nope. It’s the Illinois Constitution stopping and dictating how we proceed. Illinois does NOT need boisterous rhetoric and a lack of knowledge to get Illinois out of this mess, Illinois needs someone with a strong grasp of what CAN be done, and the politcal savy and smarts to get it to pass muster …Constitutionally. - Frenchie Mendoza - Tuesday, Apr 16, 13 @ 9:48 am: Actually, now that I’d think of it — what I’d love to see (and to hear if I were a state worker): okay, you slash my pension? Then you have to make sure that all that money owed to vendors? That gets slashed, too. I know this won’t happen — but I wish someone would establish a link between pension payments and vendor payments. In order to slash one, let’s slash both. Why stop at the pension? Why not say, okay, those services you provided? Sorry, but you provided those gratis. Thanks. Or, sorry, we can only pay you five cents for every dollar we owe. That’d change the dynamic right quick. Vendor payments — late though they be are apparently sacrosanct. But pensions? Sure, slash ‘em. Let’s see Quinn urge the vendors to get their haircut, too. I’m not hearing that. Why? - sam - Tuesday, Apr 16, 13 @ 9:49 am: Amending the Pension protection clause of the IL State Constitution does not nullify the contractual obligation of the State to those who retired under the previous language of the Constitution. - low level - Tuesday, Apr 16, 13 @ 9:49 am: Re: increased revenues, I always wondered how it was that the 1970 Con Con, that had plenty of progressives, managed to come up with a flat income tax rate. Then, completely by chance, I met Malcomn Kamin, a delegate at the 1970 convention, who had an amendment to the Revenue article at the convention to allow (not mandate, simply allow) different rates. His amendment failed, but what was amazing was how it was defeated - and by whom. - Meaningless - Tuesday, Apr 16, 13 @ 9:51 am: “I do solemnly swear (affirm) that I will support the Constitution of the United States, and the Constitution of the State of Illinois, and that I will faithfully discharge the duties of the office of (Senator / Representative) to the best of my ability.” Is there any legal recourse against the politicians that are so blatantly disregarding their oath of office? - Mason born - Tuesday, Apr 16, 13 @ 9:57 am: Frenchie In my humble opinions the reason Vendors aren’t getting haircuts is the state needs them to continue to provide goods and services. As well as if they do no new vendors will bid if they are going to get slashed. Retirees by definition are not “giving anything” to the state not saying it is right but it think that is the math in use. Of course could make same arguement for future employees but i don’t think they consider anything that far in advance. - Rich Miller - Tuesday, Apr 16, 13 @ 9:58 am: ===It was fortelling the future.=== Unfunded pension liability during Con-Con was about 60 percent. And that was without using actuarial analyses. - David0316 - Tuesday, Apr 16, 13 @ 10:01 am: Given the previous court decisions cited above, the only realistic solution would be a constitutional amendment that protected pension benefits that have been accrued be current employees and providing that future benefits earned by those employees would be accrued at a different rate. It could also allow for changes in pension benefits that have allowed for wage spiking to increase pension benefits as employees near retirement. It would be difficult to impact benefits for current retirees. - Nickypiii - Tuesday, Apr 16, 13 @ 10:03 am: Meaningless: “Is there any legal recourse against…” Yes there is! Its called an election! - geronimo - Tuesday, Apr 16, 13 @ 10:07 am: Voting them out isn’t legal recourse. Meaningless is talking about violating their oath of office to uphold the constitution… the elections can’t come soon enough. - Dewey Dilligent - Tuesday, Apr 16, 13 @ 10:08 am: Well if there will be no Con-Con, No amendment that can impact the already obligated costs, no clear way to reduce the unfunded liability (largely caused by failure to property contribute employer funds), then it’s time to start talking about real solutions. The only real option is find the money to pay the pension funds. The unions of course have proposed graduated income tax and rescind corporate tax gifts. New Idea What if we created a cash balance account for all IL workers(public and private)? Take the 2% income tax increase that is set to expire in 2014 and direct that 2% to a retirement account that earns a guaranteed 2.5% interest a year. Invest the $6 billion, any returns over 2.5% go to the unfunded liability. When a person is 65 and retired they get their money like a 401(k) with the interest they earned. It’s essentially like a loan to the State. Safeguards can be put in place to close it down if the returns are too terrible or guarantee the return money with the existing pension fund assets, should the returns be below 2.5%. 54% of private sector workers in IL have no retirement plan at all from their employer. This gives them one, it gives the state revenue for the pension fund, and it eases the budgetary pressure on the GA to fund the amortized pension debt. Dewey isn’t a lawyer, so I am not sure about ERISA. Dewey thinks that ERISA only applies to employers, not a State entity running a State Run Retirement program - a la social security, but a cash balance as opposed to a defined benefit. - PublicServant - Tuesday, Apr 16, 13 @ 10:08 am: Define exactly what you think those “future benefits” are Dave. Thanks in advance. - Oswego Willy - Tuesday, Apr 16, 13 @ 10:09 am: - David0316 -, Good point, but can you find the votes in both Chambers to begin to make this work? Tough “ask”, and I will say, it would not be a slam dunk if the ILHouse and ILSenate AND the governor were all Republicans. You are discussing amending a Constitution Article. You make a very good point, we will see if someone can get ANY pension solution to pass … ===One thing we cannot do, however, is ignore the Constitution of Illinois.=== Tough, tough “ask”, but not impossible, just impossible, today, to find that solution easily. - titan - Tuesday, Apr 16, 13 @ 10:11 am: @ roscoe tom === The longer the wait the greater the uncertainty. Take a case to the court with good attorneys on both sides and get it over with on all points. It is like suspecting a cancerous growth. The only certainty occurs when it is tested and the path to dealing with it becomes clearer. === A god idea - another one is don’t spend the “savings” until the courts have entered a final ruling that there are any. - Anon. - Tuesday, Apr 16, 13 @ 10:19 am: ==okay, you slash my pension? Then you have to make sure that all that money owed to vendors? That gets slashed, too.== And bondholders — you have to stiff them, too. - foster brooks - Tuesday, Apr 16, 13 @ 10:23 am: RENo principle of law permits us to suspend constitutional requirements for economic reasons, no matter how compelling those reasons may seem. This will devastate biased observer. - Liberty_First - Tuesday, Apr 16, 13 @ 10:23 am: At what point would the courts let the state use their police power to default on pensions? Does anyone think we are even close to that point? The system is funded about the same level as it was in 1970…. - Cincinnatus - Tuesday, Apr 16, 13 @ 10:23 am: Rich Miller said, “Prescient, eh?” More like resigned… - lake county democrat - Tuesday, Apr 16, 13 @ 10:28 am: As much as I hate Madigan and the Combine, these suggestions to trash the state constitution should disturb people more. Do whatever you have to to reform pensions going forward, bite the bullet on the cost of that hideous amendment, but don’t destroy the rule of law. - nieva - Tuesday, Apr 16, 13 @ 10:31 am: How about spending just a little less than we take in every year and get our back bills paid. I know it has been the norm to spend several billon dollars more than we have each year and somebody had to know it was eventually going to catch up with them. Now that it has slash the feel good programs and start making an effort to get us back on sound footing. I would be willing to pay more in taxes but not willing to keep up the spend so I can get reelected thinking that our state elected officals have. - AFSCME Steward - Tuesday, Apr 16, 13 @ 10:38 am: Foster: In this case, other than attempting to reduce retiree & employee pension benefits, what other steps has the legislature taken to fix this mess ??? None. It would be very difficult to establish a crisis when the sole cause of the emergency is failure to appropriate the funds to keep the funds solvent. The only proposals currently being debated do nothing to address the state’s arrearage. All of the pain is falling solely on the retirees and employees. I do not believe that a legal argument about a financial emergency would stand up unless the state could demonstrate that it has attempted to address the shortages by means other than cuts. Since the 2% temporary income tax increase is going to expire soon, a failure to extend that tax for the sole purpose of paying some of the missed pension payments would make a fiscal crisis argument very weak. “RENo principle of law permits us to suspend constitutional requirements for economic reasons, no matter how compelling those reasons may seem. This will devastate biased observer.” - unbiased observer - Tuesday, Apr 16, 13 @ 11:08 am: again to all of my admirers….we will see what happens…….I honestly wish you all the best and hope that a fair solution can be arrived at. think about me in about 2 years if nothing is done. I sincerely hope that it makes you feel better about yourselves to sit around and read the same posts to yourselves over and over again. no money is no money…..this may seem a contrived emergency to some, but just wait and see what happens. I am a firm believer in the rule of law and don’t think that that is should be easily changed. if pension reform goes thru and the courts support it, I think we can all agree that the law was not easily changed. if you are really arguing that as a state we can never change law thru constitutional means, or if you can never accept that fact that intelligent people reviewing law can come to a different agreement than yourself, I think we are wasting our time here unfortunately. these are many of the factors which have prevented agreements from occurring already. but I know one thing, when and if the money runs out, something will happen. count on that one. people will get tired of their children not being educated, of their disabled family members not receiving services, of their local hospitals folding, of basic state functionality stopping. when that happens, tough decisions will be made I can assure you. in the face of all these imminent cuts do you really think you should continue receiving the same pension benefits merely based upon a questionable constitutionality issue? we will see if that strategy works for you. again, I really wish all of you the best. we just differ in how we view this. - capncrunch - Tuesday, Apr 16, 13 @ 11:11 am: “The system is funded about the same level as it was in 1970….” On an aggregate basis it is actually better. The percentage funding levels of the pensions systems from Madiar’s report and the March 2012 CGFA report are as follows: FY 2011 1970 (GARS) 68.5 21.2 (SURS) 47 44.3 (SERS) 43 35.5 (JRS) 32.3 31.5 (TRS) 40 46.5 Aggregate 41.8 43.4 - Mason born - Tuesday, Apr 16, 13 @ 11:31 am: Unbiased To me the issue isn’t whether it should be changed or not the Issue is whether the state can completly change something because it is inconvenient to comply. While i am no fan of increasing taxes the option is there. The State owns how many Acres of land that can be sold? How many real on the ground cuts have been made? What new round of Layoffs has been proposed? Which Grant Proposals have been terminated? To say the state has no options but to throw out it’s primary document to prevent politically uncomfortable choices is a very dangerous road for all of us. - Anon. - Tuesday, Apr 16, 13 @ 11:35 am: ==no money is no money== No, “no money” is not a fact. There is a lot of money, and we are spending even more, but there are lots of things that can be cut before we renege on our contractual obligations, and lots of contractual obligations we can renege on in addition to the pension liabilities. Trying to resolve this funding problem on the backs of current retirees and employees is neither legal nor moral. ==think about me in about 2 years if nothing is done. == Doing nothing would actually be preferrable than passing the proposals you advocate, spending the “savings,” and then having the whole thing thrown out in 2 years. - Cheswick - Tuesday, Apr 16, 13 @ 11:39 am: == If economic reasons do not, what(if any) principle of law does allow the State to suspend constitutional requirements? == I think some in the legislature think that if they can get the employees to agree to doing something other than what the constitution calls for, that it’ll be okay to ignore that part of the constitution. Just my theory. - Rod - Tuesday, Apr 16, 13 @ 11:49 am: The difference between liabilities and assets is the unfunded liability. Also known as the unfunded accrued liability and the unfunded actuarial accrued liability. The General Assembly Retirement System of Illinois (GARS) Funding Status as of Fiscal Year 2011 was that its actuarial accrued liability was $ 298.4 million its actuarial value of assets was $63.2 million and the unfunded liability was $235.2 million. So GARS had a funded ration in FY 2011 of only 21.2%. According to a November 2012 special CGFA pension funding report that Rich linked to this blog the GARS funded ratio by that point had declined to 18.5% (see http://cgfa.ilga.gov/Upload/1112specialPensionBriefing.pdf ). In theory at least by 2029 GARS will go down to a funded ratio of 6.2% if the average rate of return over the next 15 years is 7%. But if it is less GARS will collapse before then if the market goes bad and it takes a hit comparable to the historic investment losses sustained by the pension systems in FY 2009. CGFA thinks things will get better after 2029 assuming a rate of return of 7%. I am glad capncrunch and some others see a relatively sunny future. I agee with unbiased observer “this may seem a contrived emergency to some, but just wait and see what happens.” GARS will be the first to go and it would be the first test case in court if our elected members of the Assembly agree to not make good on their own pensions. Let’s not go there. - wizard - Tuesday, Apr 16, 13 @ 11:49 am: not wishing to be cruel, but until the state stops all dollars to illegal aliens no matter what the program, it should not touch my pension, period. - Rich Miller - Tuesday, Apr 16, 13 @ 11:52 am: wizard, that comment says more about you than you might know. - wizard - Tuesday, Apr 16, 13 @ 12:02 pm: i am fully aware of its implications. it is what it is. - Michelle Flaherty - Tuesday, Apr 16, 13 @ 12:09 pm: Shouldn’t your handle be “grand wizard”? - Oswego Willy - Tuesday, Apr 16, 13 @ 12:12 pm: - Michelle Flaherty -, Tnext time you disappoint … will be the FIRST time … I am still laughing. - David0316 - Tuesday, Apr 16, 13 @ 12:15 pm: =Define exactly what you think those “future benefits” are Dave. Thanks in advance.= “Future benefits” would be those earned after a change in the pension law. As an example: Currently employees in SERS earn 1.66% of final earnings rate for each year of service. If an employee had worked 10 year when the formula changed, they would have earned 16.6% and bank that amount. If the new benefit was 1.5% per year and the employee worked an additional 20 years, they would have earned an additional 30%. The result would be a pension of 46.6% of final rate of earnings at full retirement age. Likewise employee contributions could be increased and full retirement age could be adjusted. Employee groups never had a problem when their unions lobbied for increased pension benefits without any increase in employee contributions. Now that some of these perks might go away, the unions cry foul. Employees in the private sector have faced these issues for years. Public sector employees seem to believe that they should be immune - reformer - Tuesday, Apr 16, 13 @ 12:20 pm: For decades our friends on the right have denounced liberal judges who engage in “loose” or liberal construction of the Constitution. They insist judges should follow the intent of the framers when interpreting the Constitution, and not reverse the plain meaning of the words. So why are conservatives so eager to dispense with their principles when it comes to the pension clause in the state constitution? - wizard - Tuesday, Apr 16, 13 @ 12:27 pm: mf-cute waiting now for word and stl to weigh in to complete my humor for the day - capncrunch - Tuesday, Apr 16, 13 @ 12:27 pm: Rod I did not intend to imply that I see a sunny future. The pension problem is very serious and I don’t see a good outcome. I have accepted the fact that I will be paying more taxes in the future. It may be higher income taxes, property taxes, taxes on items currently untaxed or some other new tax. It is clear to me that spending cannot be cut enough without social unrest. And I doubt that the Court will buy the argument that the legislaive branch of government has exhausted all approaches to solving the problem. Nor are they likley to believe that a decision they make will force a default. A default would be a consequence of decisions made by the legislative branch. Legislators know legal pension reform is possible but are unwilling to pass such reform if they risk losing the next election. The problem shifts from solving the former problem to avoiding the latter. Solving the latter problem becomes one of educating the electorate. Losing the next election would be “a failure to communicate.” We are in this mess because we are not paying attention. In my district we have relected five times a person who in 2003 voted to divert $2.7 billion of pension obligation bonds for spending elsewhere and in 2005 voted to reduce fiscal year 2006 and fiscal year 2007 pension fund payments by $2.3 billion. - Obama supporter - Tuesday, Apr 16, 13 @ 12:29 pm: The problem is they want revunue now! The only way is to screw the middle and low middle class current retiree. On the face of this… Those who claim to be the party of Obama and Kennedy… This is pure hypocrisy and wrong! How the Democratic Party in Illinois can “stick it” to retired workers is sickening. Is Obama talking about federal retirees giving up some of their monthly pension… No! I for one, will not vote or support any Democrat who helps with this travesty. A Republican Governor would probably help the Democratic leadership find their way again! - Rich Miller - Tuesday, Apr 16, 13 @ 12:30 pm: Cute. but accurate. - PublicServant - Tuesday, Apr 16, 13 @ 12:32 pm: Ah, I see. So, you’re proposing a change to the rate at which benefits accrue, specifically citing an example of diminishing the existing rate from 1.66% to 1.5%. Oops! There’s that diminish word again…making that unconstitutional. Now, for your rant, which has nothing to do with supporting your “future” benefit explanation, your anti-union bias is showing. When public sector wages and benefits are compared to private sector wages and benefits when adjusted for educational level, the private sector still comes out on top and at an increasing percentage as educational level increases. Employees in the public sector have faced that issue for years. Those increases in pension benefits that you mention are a small part of the unfunded liability. As has been stated again and again, the state’s failure to pay its actuarially required annual contribution is the major cause of the pension shortfall…by far. You seem like a smart guy though. Do you have any idea how much the unfunded liability would be reduced if your example was by some miricle found to be legal and was enacted? - Formerly Known As... - Tuesday, Apr 16, 13 @ 12:32 pm: === Prescient, eh? === Very much so. In some repsects, it appears the Convention delegates were trying to make the pension protections so strong that virtually everyone would understand long in advance: “Hey, we’ve got to make sure the pension funds are stable. We don’t want to have to be cutting medicaid and mental health and law enforcement in a few years just to pay these pensions. We’ve got to handle this mess before it gets worse.” Unfortunately, Springfield ignored this massive, clear and fair warning in the Constitution. - wizard - Tuesday, Apr 16, 13 @ 12:35 pm: i enjoy how i am a “grand wizard” because i want all that i have earned and have problems with dollars going to those who have not earned them. lol - AFSCME Steward - Tuesday, Apr 16, 13 @ 12:37 pm: Michelle Just because someone does not agree with your position should not equate them with the KKK. The fact is that Illinois is spending millions of dollars each year for benefits that for persons that are in this country illegally. It is a perfectly legitimate question to ask, when the state is billions behind in payments of vendor bills & pension appropriations, whether we should be funding people that are breaking the law. Most if not all of these state expenditures are not eligible for any federal offsets. Shouldn’t your handle be “grand wizard”? - Rich Miller - Tuesday, Apr 16, 13 @ 12:41 pm: Yes. Great idea! Go all racial! That’ll for sure convince the Democratic super-majorities to go along with you. Idiots. - wizard - Tuesday, Apr 16, 13 @ 12:42 pm: steward, thanks for the support but it is obvious that the blog owner agrees with mf. - Oswego Willy - Tuesday, Apr 16, 13 @ 12:47 pm: ===Go all racial! That’ll for sure convince the Democratic super-majorities to go along with you.=== - wizard -, if you can’t see how your position, and your thought on HOW to make your position possible, with Veto-Proof Dem Majorities, and the ironic humor of what you posted and - Michelle Flaherty -’s response, I can’t help you. It’s funny. - PublicServant - Tuesday, Apr 16, 13 @ 1:09 pm: Frankly Rich, while I don’t agree with Wizard, given the way things have gone in the legislature to date, I think its well past the time that we could convince them to go along with us. I hope I’m wrong, but I haven’t seen anyone other than Cullerton publicly worry about the constitutional issues, and his solution only offers a Hobson’s Choice thus no consideration at all. I’d love to be wrong, however. I think my only hope are the courts. - reformer - Tuesday, Apr 16, 13 @ 1:14 pm: Let’s not scapegoat immigrants for the state’s unfunded pension liability. That’s even less accurate than blamed Democrats alone for the problem. - Frenchie Mendoza - Tuesday, Apr 16, 13 @ 1:16 pm: – So why are conservatives so eager to dispense with their principles when it comes to the pension clause in the state constitution? – They’re too haughty to admit it. They’re as full of it as everybody else is. But when there’s an impediment preventing them from pocketing profits and consultant fees, they pretend it’s “good business” to get rid of the impediment. Hence, the impetus for slash-and-burn policies and the desire for a “loose” interpretation of (in this case, at least) a pretty clear sentence in the constitution. Never mind that the 2nd amendment is (literally) far *less* clear than the sentence about pension benefit diminishment (grammatically speaking, at least). Try reading the 2nd amendment out loud and tell me that there’s something not grammatically “off” about the way the two clauses are spliced together with a comma. - foster brooks - Tuesday, Apr 16, 13 @ 1:17 pm: REEmployee groups never had a problem when their unions lobbied for increased pension benefits without any increase in employee contributions. Now that some of these perks might go away, the unions cry foul That’s completely false, I went from contributing 0% because I gave up a raise to 8.5% virtually overnight. - Roadiepig - Tuesday, Apr 16, 13 @ 1:58 pm: David 0316: The only two changes to my pension in the 30 years I worked for IDOT was changing the years of service from 7 to 20 to earn premium free health insurance ( work more years for benefit but have state pay our 4% pension contribution ,which it turned out the “vacationed” ,in 1992 I think) and moving our position titles into the alternate formula system due to the dangers of our job ( my rate of our contribution went from 4% to 8.5%) . So- in neither case did my pension changes (or sweeteners, as the pension reform people like to call them) come at no cost to myself. Can’t relly think of any other pension changes (sweeteners) that came cost free to retirees except for the school lobbyists who got their pension for one day of work ( later taken away) or loosing state reps who governors appointed to cabinet positions to bost their pensions after they lost thier races. That’s a tiny minority of retirees, not the rest of us who played by the rules - Roadiepig - Tuesday, Apr 16, 13 @ 2:02 pm: After reading Foster Brooks comment- the year they “picked up” our contributions was in exchange for the employees skipping raises, not for the change in years in service for premium free insurance. My mistake. - archimedes - Tuesday, Apr 16, 13 @ 2:03 pm: As far as employees receiving new and enhanced benefits and not paying any increase. In 1971, the normal cost for TRS (the largest of the 5 systems) was 15.8% and emplyees paid 8% - so about 51% of the normal cost. In 2013, the normal cost is 18.3% and employees are paying 9.4% - or about 51% of the normal cost. Beneifts did increase during these 42 years - the COLA went from 2% simple to 3% simple to 3% compounded, for example. The rate of accruing service credit changed. But a look at every single year shows that the employee portion of the normal cost - in every year - was 50% or greater of the total normal cost in every year with the exception of 1995, 1996, and 1997 where the employee normal cost paid 49% of the total normal cost. On average, for the 42 year period, the employee normal cost paid 53% of the total normal cost. - Dewey Dilligent - Tuesday, Apr 16, 13 @ 2:05 pm: The “other” retirement problem is that 53.4% of private sector workers in IL have NO retirement plan. Not a pension, not a 401(k), nothing. They will only have Social Security and their own savings(which as you can guess, is not a lot). This is going to cost the State a lot of money in safety net services in the very near future. Stat http://www.woodstockinst.org/blog/blog/retirement-insecurity-pervasive-in-illinois,-new-report-shows/ - Ready To Get Out - Tuesday, Apr 16, 13 @ 2:32 pm: Dewey….I know it’s just a small detail, but I don’t see anywhere in the article where it says those private sector workers have NO retirement plan, not a pension, not a 401(k), nothing. All I can find is it says they don’t have “access to employment-based retirement savings plans.” I downloaded the report and only saw references to access again. Did I miss something? - Ruby - Tuesday, Apr 16, 13 @ 2:48 pm: Dewey: What happened to the pensions of workers in private industry? Why are they only left with Social security, their savings, and their 401k plans? How is the state responcible for providing a safety net for these workers? - illinifan - Tuesday, Apr 16, 13 @ 3:00 pm: Ruby….big business found a way to save money by stepping away from a defined benefit plan and converting to a 401K. Those defined benefit plans are there for some of the older workers but they changed somewhere in the 80s. I remember my husband converting from the Sears stock match plan, to a defined benefit plan, to a 401K during those years. For most government employees the defined benefit plan is meant to be a replacement for Social Security since many state employees (Teachers and university employees) do not contribute to Social Security. Many of these folks will never be eligible for social Security even as their spouse’s dependent or survivors benefits. So in some ways think of the state pension as you would Social Security. Private industry you get SS, 401K and other savings. State you get pension, deferred comp and other savings. Some state employees in SERS employees get both since they paid into both systems (example 4.5 SERS, 6 for Social Security). I think I saw some data that this group only reflects about 20% of the state retirees? Not sure on that number. - Frenchie Mendoza - Tuesday, Apr 16, 13 @ 3:23 pm: It’s a race to the bottom. Folks figure if the (much vaunted) “private sector” workers can’t have it — well, neither should the (much maligned) public sector workers. Mostly, it’s the private folks expressing sour grapes — hey, we don’t have it, so you shouldn’t either! Same goes for union complaints — as in “the union is too strident” or “these unions are destroying our country.” Ironically, it’s these private sector folks who could benefit the most from (a) a defined benefit plan and (b) stronger union representation. Because they don’t have either, they figure, okay, public sector shouldn’t either. So, yeah, it’s a race to see who can get the least fastest. And ironically — and this what many of those private sector folks don’t understand — is that it’s the conservative business folks that are pocketing the profits. Unions (and the state constitution, BTW) are the only things standing in the way. What, Rauner wants to shut down governemment for a few weeks to “rewrite the contracts”? Brilliant. What he means is that he wants take money out of the pockets of the workers and put the money in the bank accounts of consultants and cronies. Yet the private sector folks drink the kool-aid — and why? So Rauner and his buds can get rich while everybody else loses? It’s weird — and one of the weirdest things about the rise of the conservative, wealthy right. - Dewey Dilligent - Tuesday, Apr 16, 13 @ 3:23 pm: @Ready I guess it only says “lacks access.” So I guess the employer could offer some contribution to a plan they don’t sponsor, but I’m not sure how that works. To me “lacks access” mean the employer is not contributing to any retirement vehicle for their employee. - PublicServant - Tuesday, Apr 16, 13 @ 4:12 pm: Agree totally Frenchie. That many people don’t see it as you put it (Rauner and his buds) benefitting from turning one group of what they consider to be takers (or at least non job creators) against another group of takers while they get richer is a mystery to me. - JB13 - Tuesday, Apr 16, 13 @ 4:25 pm: The infighting among the Democrats that control the state government should be really interesting to watch in coming years as the public workers unions and their supporters square off against the public aid recipients and their supporters in a fight over the dwindling resources available to those who are not now or were in the past employed or married to someone employed by government in Illinois. Agreed that the state constitution forbids the kind of changes sought by reformers. But it should also be acknowledged that economics doesn’t conform to the law. If you’re out of money, you can’t just pass a law that says the money must be paid. Not at the state level, at least. I wonder how long the people of Illinois will continue to allow their government to be turned, more and more, into little more than a pension plan with police powers. - Ruby - Tuesday, Apr 16, 13 @ 4:28 pm: Dewey: Private employers do contribute to their employees’ retirement with a 6.2 percent matching contribution to Social Security. Some employers contribute to their employees’ 401k plan as well. - Anon. - Tuesday, Apr 16, 13 @ 4:49 pm: ==If you’re out of money, you can’t just pass a law that says the money must be paid. == IF - geronimo - Tuesday, Apr 16, 13 @ 6:41 pm: A masterful plan, crafted .early in the game is still working Pit private employees against public so as to divert the attention from the real people who should receive our wrath–the legislators who played so recklessly and robbed the pension funds of their full payment. And that theft is affecting everyone in this state. Recently somone asked me what the funded percentage would be in TRS if pension holidays and “diversions” hadn’t taken place. I said I thought it would probably be in the 80% range, as IMRF is. No one ever diverted funds or skipped the payment to fund IMRF. So why the anger at pension contributors? It’s so frustrating to see the web that’s been spun to create illusions. Yes, it’s underfunded. Don’t blame employees who never missed a payment towards their own retirement. Where is any demand for accountability from our elected? Can they just keep on doing as they’ve done for decades now—using funds however they feel and then blaming the victims of this theft? Why isn’t there more concern for ethical, moral behavior or is it just a fact of life that we can expect to elect dishonest manipulators? If we accept it and there are never any consequences we can just assume more of the same in our futures. - unbiased observer - Tuesday, Apr 16, 13 @ 9:30 pm: jb-13 I wonder how long the people of Illinois will continue to allow their government to be turned, more and more, into little more than a pension plan with police powers. i think about 2 or three more years, and yes it will be interesting to watch. meanwhile we will continue to read people posting things on here to try to encourage themselves with legal arguments. no money is no money. in a couple years over 30% of annual budget goes to pension obligations, unless changes occur. pension plan with police powers. has a nice ring to it. will see how the majority of the state starts feeling about that when schools start closing, laying off staff……will see how folks feel when we shut down programs for their disabled family members…..will see how folks feel when their local hospitals start laying people off and closing. yeah thats ok because people on here think all these things should happen before their pension benefits are even minutely decreased. gives me a great feeling inside when i think about it. - archimedes - Wednesday, Apr 17, 13 @ 8:43 am: Unbiased Observer - I think the reticence you see is reaction to perspective you hold and represent. The State has pension payment and debt for pension payment not made. The pension payment is quite modest - less than 5% of the General Revenue Fund budget. The debt for pension is quite large - and that is the issue. Our elected officials chose to run up this debt - rather than pay the more reasonable pension payment over the last more than 50 years. Now we are stuck with it. Yes - the State increased the income tax from 3% to 5%. So all have been taxed toward this debt. But now, at the same time the income tax is to come down to 3.75%, the solution - at least from HB3411 - is to simply not pay that debt, to reduce it by 30%. To most that are owed that - have earned the pension (it is, after all, comepnsation for work already performed) - that seems unfair. The Press, some politicians, and some posters try to justify the 30% reduction by making false claims that the benfits have been increased - and that is the cause of the hole that has been dug. COGFA reports, analysis of normal cost, and other data all prove that not to be the case. Never the less - here we are. We can continue the junior high dance, with boys on one side and girls on the other. Or we can grow up, accept this as a debt that is owed, and negotiate a solution. Yes - I think it will require some reasonable sacrifice (reduction) in benefits - maybe future benefits not yet earned. It will also take more money. Sorry, comments for this post are now closed.