Some halfway decent pension news for a change
Friday, Dec 20, 2013 - Posted by Rich Miller
* From the AP…
Stable state funding over the last two years meant key state employee pension funds didn’t have to sell assets to meet payments in 2013, according to a report released Thursday.
The State Retirement Systems, covering pensions for former state employees, judges and lawmakers, withdrew $29.7 million in 2013, down 88 percent from $248.7 million a year earlier, Auditor General William Holland wrote in an annual financial audit of the Illinois State Board of Investment.
The nearly $30 million withdrawal in the fiscal year that ended June 30 is small enough for the Board of Investment to absorb with cash flow, said William Atwood, executive director of the agency, which manages the SRS portfolio.
But when withdrawals hit hundreds of millions of dollars, it means selling assets, such as stocks and bonds, highly liquid securities that make up about 80 percent of the board’s $12.9 billion portfolio, he added.
* Meanwhile, Sen. Matt Murphy (R-Palatine) talked about the new pension reform law at the Union League Club this week…
Murphy, who was a member of the Conference Committee for Pension Reform, which spent the summer hammering out the bill passed on Dec. 2, said the committee tried to “strike the right balance.”
“This bill, I think, goes as far as we could go politically,” he said, “given the environment we’re in.”
* But one of Sen. Murphy’s fellow Republicans, Rep. Jeanne Ives, openly mocked him…
“‘We had to come up with a way to politically satisfy the Democrats, this is as far as we can go given the environment we were in.’ Are you kidding me?” Ives said, referring back to comments made by Murphy. “Is that any way to respond to a serious problem if you’re a mature adult?”
Whew.
* By the way, I told you earlier this week that Ives had penned a Tribune op-ed defending her vote against the pension reform bill…
The Tribune may bend to the will of Mike Madigan and provide political cover to the same people who brought us the most unfunded pension systems in the country but I will not. Our party’s stance in the ILGA is to uphold fiscal responsibility and strong policy at every decision-point. Let’s not retreat from this mission.
* But this is how Rep. Ives defended her vote for Madigan’s pension bill in May…
It is not a secret that I do not think that Senate Bill 1 is an adequate solution to our pension crisis. However, pension reform is needed now.
I guess the word “now” has different meanings in May and December.
- train111 - Friday, Dec 20, 13 @ 11:53 am:
Dear Rep Ives
You know that you are in the minority don’t you. You can stand on your soapbox on the corner of Roosevelt and Main in Wheaton and proclaim your views all you want. You can spend all day loudly criticizing Sen Murphy and others in your party for bending to the will of the Democrats.
At the end of the day all your words will amount to zero, nothing, nada, null. I have a penny in my pocket that is worth more than all your words on this.
It’s either do smething to effect even a partial solution or do nothing at all if it doesn’t meat your ‘true conservative’ standard. You may have passed the sniff test for the tea party voters in your district, but you sure miss the bus when it comes to actually getting anything done. Governing is a whole lot harder and messier than loudly proclaiming tea party platitudes!!
- Norseman - Friday, Dec 20, 13 @ 11:57 am:
I don’t agree with either Murphy’s vote for SB1 CC or Ives stance for a more draconian attack on public workers, but it’s amusing - albeit typical - to see extremist republicans attacking conservative republicans.
- DuPage - Friday, Dec 20, 13 @ 12:05 pm:
When I have talked to Jeanne Ives, she had a definite mannerism, kind of a quick-draw shoot from the hip responses.
- SonofSuperAbe2014 - Friday, Dec 20, 13 @ 12:13 pm:
Jeanne Ives was for pension reform before she was against it.
- Mongo - Friday, Dec 20, 13 @ 12:15 pm:
Ditto Norseman. I feel sorry for Wheaton agencies that have to reach out to this off-the-wall legislator. What a dilemma…having the least effective (or one of them) legislator is kinda like taxation without representation!
- A guy... - Friday, Dec 20, 13 @ 12:16 pm:
Her approach just may have swung 10 votes in favor. Maybe more. Every tool in the box is built for something.
- Palm Tree - Friday, Dec 20, 13 @ 12:18 pm:
Watching these Rauner shills try to justify their flip flop on pension reform is nauseating. As a West Pointer, isn’t Ives supposed to have some integrity?
Just say you’re new position on pension reform is at the request of candidate Rauner and Ken Griffin. Because it is.
- wordslinger - Friday, Dec 20, 13 @ 12:22 pm:
Who knew that actually making adequate contributions to the pension funds would have positive results?
- A guy... - Friday, Dec 20, 13 @ 12:23 pm:
PT, Pretty sure Ives is not a Rauner shill. Look a little harder and you’ll figure out why. One thing I’m nearly positive they don’t teach and drill at West Point is compromise.
- Under Influenced - Friday, Dec 20, 13 @ 12:23 pm:
Jeanne Ives passed 0 bills this past session in which she was the Chief Sponsor….
http://www.ilga.gov/house/RepBills.asp?MemberID=2045&Primary=True
- Michelle Flaherty - Friday, Dec 20, 13 @ 12:31 pm:
Oh if only Rep. Ives could served in the Pate Philip era.
- mid-level - Friday, Dec 20, 13 @ 12:43 pm:
With regards to the pension law I was just curious about where all the “before the ink dries” lawsuits are?
- Demoralized - Friday, Dec 20, 13 @ 12:46 pm:
==“Is that any way to respond to a serious problem if you’re a mature adult?”==
We’re still waiting for you to act like an adult, Rep. Ives.
- Demoralized - Friday, Dec 20, 13 @ 12:48 pm:
Rep. Ives suffers from the same delusion that some of the extreme wing of the Republican Party in Washington suffers from. They seem to think they can get what they want even though their party doesn’t control the government. Clueless is the best way to describe Rep. Ives and those like her.
- Sparky - Friday, Dec 20, 13 @ 12:50 pm:
mid-level - Friday, Dec 20, 13 @ 12:43 pm:
With regards to the pension law I was just curious about where all the “before the ink dries” lawsuits are?
Patience is a virtue. They are coming. And the more I have looked into bill, the more I believe a good portion of it will be struck down by courts. And then we will be back at it again after wasting time and money and putting state employees through a lot of grief. But by that time elections will be over and that is a major reason this happened imo.
- PublicServant - Friday, Dec 20, 13 @ 12:51 pm:
===Who knew that actually making adequate contributions to the pension funds would have positive results?===
And to add to Word’s most excellant observation, the key to passing the bill when they did, is that if you’re going to base your case of unilateral abbrogation of a contract on the state’s police powers in the face of an economic crisis, you need to pass the law and get it to the courts before that economic crisis is completely abated for crying out loud. Never mind that the savings is out 3 decades or so. Just sayin.
- Juvenal - Friday, Dec 20, 13 @ 12:53 pm:
One thing is for sure, Rep Ives knows nothing about the behavior of mature adults.
Temper tantrums are another matter
- Ghost - Friday, Dec 20, 13 @ 1:04 pm:
Was it lincoln who urban legend indicates allgedly responded to something like this by saying, “I was right then and i am right now.”
(he supposedly took two contradictory legal positions on the same basic facts in two seperate matters)
- Norseman - Friday, Dec 20, 13 @ 1:05 pm:
mid-level, it takes time to properly research and prepare a lawsuit. With the ramifications to all involved, I want them to get it right the first time. I would hate to have my retirement security dependent upon a poorly researched case and poorly written brief. They also need to have their P’s and Q’s in order for oral arguments.
- Powell - Friday, Dec 20, 13 @ 1:17 pm:
to say that the spring bill and the december bill are similar is ridiculous, so I have to defend on Ives on that point.
But that’s it….
- PublicServant - Friday, Dec 20, 13 @ 1:18 pm:
===to say that the spring bill and the december bill are similar is ridiculous, so I have to defend on Ives on that point.===
And those big differences are?
- RNUG - Friday, Dec 20, 13 @ 1:19 pm:
No need to hurry the lawsuit(s) into court without fully vetting the bill and getting all the ducks in a row. What was finally passed was enough different in total and detail from the original SB0001 and SB2404, although ideas from those and other bills did get included. Plus there are number of interesting nuances of unequal treatment that will mostly likely create, a minimum, several different classes of petitioners, each with somewhat different issues.
The bill’s effective date is June 1, 2014. The first significant financial effects are June 1, 2014 (lowered contribution rate) and then January 1, 2015 (lowered AAI), so there really isn’t a need to rush to court today.
As Norseman said, better a properly prepared brief than a shotgun approach.
- RNUG - Friday, Dec 20, 13 @ 1:20 pm:
And to the actual posting … isn’t it amazing how much difference proper contributions make?
- Formerly Known As... - Friday, Dec 20, 13 @ 1:25 pm:
Funny how good news concerning our pension system doesn’t start coming out until AFTER the “big vote” gets pushed through.
It certainly wouldn’t have helped “the cause” much to have stories like this trickling out shortly before that vote.
By the way, did anyone else notice COGFA released a report the day before showing that our unfunded pension liability had increased less than $1 billion during 2013, as compared to an increase of $13.5 billion in 2012?
Unfunded liabilities leveling off, no longer selling assets… glory be!
“Hurry up and push these cuts through before any more good news trickles out.”
- Anonymous - Friday, Dec 20, 13 @ 1:41 pm:
The way to remedy the so called most unfunded pension systems in the country is …….to FUND THEM. Not slash the only income many retirees depend on. Look only as far as IMRF. Yes, I know past history is past history. But can you only imagine what gumption it would take for some like Ives to put her money where her mouth is and fix the systems by eliminating some tax loopholes for corporations, generate more income from taxing services and altering that so-called iron-clad constitution (that is apparently not so iron-clad for pensions, however)by joining the other 43 states that have progressive state taxation? Much easier to push around old people.
- PublicServant - Friday, Dec 20, 13 @ 1:50 pm:
@Anonymous 1:41 - Don’t go makin’ sense now. You’ll ruin the right wing happy dance now taking place.
- PublicServant - Friday, Dec 20, 13 @ 1:51 pm:
Now, notice that I didn’t say that everyone at the dance was on the floor tripping the light fantastic. But the dance is still a current event.
- Joe Bidenopolous - Friday, Dec 20, 13 @ 1:58 pm:
Man, she’s just nuts. Entertaining, but N-V-T-S nuts. I’d say I hope she gets beat, but the GA needs contrast to the incresingly vanilla members coming in every cycle, and if we can’t have the characters of yore, she’ll have to do.
But man do I also feel sorry for the people she “represents” though I guess you get what you vote for.
- Wensicia - Friday, Dec 20, 13 @ 2:05 pm:
==isn’t it amazing how much difference proper contributions make?==
Astonishing!
Too bad you can’t request a gag order on a state rep. Stay klassy, Ives.
- Tsavo - Friday, Dec 20, 13 @ 2:15 pm:
I just cannot see how the Supreme Court can uphold
SB1 based upon their decision in Jorgensen V Blagojevich from May 2004.
In reaching this result, we acknowledge that substantial budgetary challenges currently confront the Governor and the General Assembly. The adverse economic conditions facing so many of our fellow citizens have taken an inevitable toll on the state’s treasury. Revenues are not keeping pace. Despite ongoing efforts by the Governor and legislature, shortfalls persist. We do not mean to diminish the seriousness of the situation or appear insensitive to the difficulties faced by our coordinate branches of government. Those difficulties are undeniable, and we are highly cognizant of the need for austerity and restraint in our spending. As administrators of the judiciary, we make every effort to economize whenever and however we can. One thing we cannot do, however, is ignore the Constitution of Illinois.
This court did not set the salaries judges receive, nor did we make COLAs a component of those salaries. The salaries, including their COLA component, were provided by law in the manner described earlier in this opinion, Now that those salaries have been implemented, the constitution commands that they be paid. No principle of law permits us to suspend constitutional requirements for economic reasons, no matter how compelling those reasons may seem.
- PublicServant - Friday, Dec 20, 13 @ 2:23 pm:
@Tsavo - You obviously don’t have the vision that the 60+ in the house and 30 in the senate who voted for this bill have, but I’m sure it passed because of the smugness of its opponents, so quit being smug, if that’s what it is that you’re doing.
- Tsavo - Friday, Dec 20, 13 @ 2:30 pm:
Not being smug, just posting a prior court decision.
- Anonymous - Friday, Dec 20, 13 @ 2:35 pm:
We didn’t really think this was a pension “crisis” did we? Seriously. When the level of funding today is the same percentage as in 1970, how did it suddenly become a crisis now? Yes, amazing coincidence that things are leveling off now that benefits have been slashed. Real coincidence.
- PublicServant - Friday, Dec 20, 13 @ 2:40 pm:
Oh, sorry. You’re absolutely right. I mistook your honesty for smugness. Just saying that many people don’t let facts cloud their judgement on this issue…and I say that as unsmugly as is humanly possible for one confident in the correctness of their position.
As RNUG points out, this bill is all about politics, and there is no morality in that arena.
- Ghost - Friday, Dec 20, 13 @ 2:46 pm:
I was shocked to learn that the sky is not in fact falling, I had just been hit on the head by a piece of asbestos falling of the stratton bldg
- Grandson of Man - Friday, Dec 20, 13 @ 2:58 pm:
“Is that any way to respond to a serious problem if you’re a mature adult?”
Yes. You can’t have something that isn’t there.
- AFSCME Steward - Friday, Dec 20, 13 @ 2:58 pm:
Rep. Ives, in a democracy, in order to implement policy you have to have the votes. You don’t. Mature adults know how to compromise. Mature adults don’t throw tantrums everytime they don’t get their way. There are many reasons why the GOP has become insignificant and irrelevent in Illinois. You are one of those reasons.
“* But one of Sen. Murphy’s fellow Republicans, Rep. Jeanne Ives, openly mocked him…
“‘We had to come up with a way to politically satisfy the Democrats, this is as far as we can go given the environment we were in.’ Are you kidding me?” Ives said, referring back to comments made by Murphy. “Is that any way to respond to a serious problem if you’re a mature adult?”
- Arthur Andersen - Friday, Dec 20, 13 @ 3:18 pm:
Before anyone thinks the pensions are in any way out of their woes here, remember a couple things:
1) The funds all made money last year, several points above the assumption. That makes a bigger difference in any given year, good or bad, than the State contribution.
2) Insert the SB1 funding schedule for the SRS and hypothetically with the same returns, they would be in a negative cash flow position.
3) How about TRS and SURS?
- Norseman - Friday, Dec 20, 13 @ 3:27 pm:
AA,
Forgive me for being obtuse, but can you explain how 2 works. Thanks
- Just Me - Friday, Dec 20, 13 @ 3:33 pm:
If Ives was a mature adult she (1) wouldn’t openly bash one of her colleagues, and more importantly realize that (2) her approach to pension reform did not have the votes to pass.
- Arthur Andersen - Friday, Dec 20, 13 @ 3:50 pm:
Norseman, honestly my point was a bit obtuse after I re-read it. Friday afternoon and such. What I was trying to say was that starting in FY15, the State’s share of funding for the systems is going to be less, and particularly on a cash basis, even with an above-average return, we are likely to see negative cash flow (the lower employee contributions also will be a factor.)
Unrelated, but a tip of the cap to ISBI for an excellent 14.1% return last FY.
- Anonymous - Friday, Dec 20, 13 @ 3:53 pm:
The premise behind Ives’ comments (assuming she’s trying to make sense) is that there was a constitutional way to diminish the pension liability that went further than the bill that passed and it was only the need to compromise with Democrats that led to the less ambitious bill passing. Assuming she’s trying to be intellectually honest for a moment, has she ever articulated what that constitutional, more ambitious approach is? The one that, if there was no need to compromise with the Democrats, she would have voted for?
- Senator Clay Davis - Friday, Dec 20, 13 @ 3:58 pm:
===Clueless is the best way to describe Rep. Ives and those like her===
Ives is Illinois’ Ted Cruz. And I know she would probably take that as a compliment. Except that she’s not as good at being a kook as he is.
It’s hard to take Jeanne Ives seriously. She comes off as an pampered suburbanite parroting the Fox News talking points but without any thoughts of her own. That stuff works in DC, but this is Illinois. Her simplistic tea-party ramblings aren’t going to get her very far.
- SonofSuperAbe2014 - Friday, Dec 20, 13 @ 4:06 pm:
===It’s hard to take Jeanne Ives seriously. She comes off as an pampered suburbanite parroting the Fox News talking points but without any thoughts of her own. That stuff works in DC, but this is Illinois. Her simplistic tea-party ramblings aren’t going to get her very far.===
Even pampered suburbanites have more sense.
- DuPage - Monday, Dec 23, 13 @ 10:41 am:
@Joe Bidenopolous 1:58pm=I guess you get what you vote for=
I did not vote for her. She seemed too radical, too extreme. That is exactly how she turned out.