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* From the Wall Street Journal…
Lawmakers in Illinois say they may try to fix the state’s ailing pension system by asking current workers to pay more into the plan, though the approach faces substantial legal and political obstacles.
The lawmakers are also entertaining the politically difficult idea of applying broader pension changes made this year for newly hired employees to current workers. Those include raising the retirement age and scaling back on annual cost-of-living raises. […]
“There is growing momentum for additional pension reform and this is something that definitely should be looked at,” said [budget director David Vaught].
He added that if the legislature voted to increase employee contributions in the current legislative session, Mr. Quinn, a Democrat, “would not stand in its way.”
House GOP Leader Tom Cross has a bill that would hike current employee pension contributions to 20 percent of salary. The idea would be to “encourage” workers to opt out of the defined benefit system and move to either an annuity program (similar to what SURS uses) or a 401(k) type dealio.
Discuss.
* Other budget-related stuff…
* ADDED: Editorial: Raise cigarette tax $1 to fund road plan
* ADDED: Editorial: Don’t blame unions for fiscal problems
* Quinn budget chief doled out pay hikes: On Jan. 13, while Quinn approved a 66 percent increase in the income tax, Vaught voted to boost the pay of Aaron Carter, director of the Illinois Procurement Policy Board, and Will Blount, who serves as a senior procurement analyst with the five-person agency.
* Chuck Sweeny: Republicans not convinced by sad budget stories
* CollegeIllinois’ promise of tuition benefits looks iffy: That sounds reasonable, except that the unspecified “cancellation fees” are found in the fine print. They are: “The lesser of $100 or 50% of amount paid.” Yes, taken literally, that means you could lose half the amount you deposited by withdrawing from your contract!
* House committee votes to bar 3rd Street rail funding
* Cigarette tax hike runs into opposition: Republicans charged Cullerton is manufacturing a crisis over the construction money as a way to push the cigarette tax hike because he has long sought an increase in the 98 cents-per-pack the state now levies. Officials with both Gov. Pat Quinn’s budget office and the state transportation department said no road or construction programs are held up this year because of the appellate court decision.
* Buck-a-pack cig tax proposed: Steve Brown, spokesman for House Speaker Michael Madigan, D-Chicago, said he’s not aware of any discussions about this latest proposal to hike the cigarette tax. He also said there are mixed feelings among lawmakers about the need to reauthorize the capital plan while the case is still in the courts. Some lawmakers think the state will prevail, and others believe there already are enough projects under way to get the state through another construction season.
* Cullerton eyes cigarette tax hike, GOP backs away
* VIDEO: John Cullerton on Cigarette Tax
* Vouchers Bubble Up Again In Springfield: Sponsored by State Sen. Matt Murphy (R-Palatine), the bill mirrors the vouchers proposal State Sen. James Meeks (D-Chicago) put on the table about a year ago. No specific numbers of student and costs are detailed in SB 1932, but Meeks’ bill, which passed the Senate but ultimately failed in the House, would have given up to 30,000 CPS students a voucher worth about $3,700.
* TIF Reform Comes To Springfield: A host of TIF bills have been introduced into the current General Assembly. One of the bills proposed would exempt Chicago Public Schools from the taxing bodies that lose property tax dollars because of the existence of TIF districts in the city. Another would send “surplus” TIF dollars back to the taxing bodies each year.
* Legislator: Metra board wasting money, should resign
* Anderson: Quinn plan off base - Regional superintendent turns to county board for support
* Illinois law signed requiring voter referendums for expanded community mental health services
posted by Rich Miller
Wednesday, Mar 16, 11 @ 9:50 am
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I haven’t endured years of no raises, and many other years of minimal raises well below the rate of inflation, and furloughs of late to accept any lessening of my pension. If that’s going to happen, just make the effective date of any bills at some point in the future, and I’ll retire before then. I’m assuming many others will too.
Comment by PublicServant Wednesday, Mar 16, 11 @ 10:00 am
Interesting line in the Sweeney piece by local Rockford Republican Dave Syverson regarding beyond late payments to schools and hospitals: “The governor could borrow money up until June 30, and he can borrow again July 1,” Syverson said. What a lame attempt to push-off responsibility. Anybody want to lend me 8.7 billion for 4 months? I am sure I can find someone to borrow from for 12 months after that! When will Republicans get real on this issue instead of using it to score half-baked political points?
Comment by Watchin & Laughin Wednesday, Mar 16, 11 @ 10:01 am
The dems may have learned something from the conflagration in WI. The unions have power but it is not unlimited. Changes can be made that will adversly affect the rank and file state workers and the world doesn’t come to an end. These trial balloons will stir the pot - then we’ll see what the GA has the stomach to actually put into place.
Comment by dupage dan Wednesday, Mar 16, 11 @ 10:12 am
Well, with negotiations coming up fast for the new AFSCME state employee contract, it may be a good time to start horse trading on the issue of additional pension reform. However, Vaught’s statement that Governor Pat “would not stand in its way” should raise some eyebrows. Means what? He won’t do anything to pursue pension reform but if somebody does it for him (and it doesn’t annoy AFSCME too much) he’ll sign it? This is leadership? Has Governor Pat even acknowledged that there is a pension problem, post income tax hike and his “pension reform.”
PublicServant–since you are an Illinois state govt employee, retirement is your choice, not the choice of the market, as is the case for most of us non-public employees. However, if you choose to do so, there will be a long, long line of potential replacements. Government jobs are beyond golden these days. Read the papers.
Comment by cassandra Wednesday, Mar 16, 11 @ 10:15 am
Gradual changes to a 20% investment by State workers into their pension makes sense. The SURS system seems to work pretty well.
Comment by downstate hack Wednesday, Mar 16, 11 @ 10:15 am
Dupage has hit it on the head. I think labor is going to be disappointed in the Dems. Changes have to be made. It is now a matter of how big the changes are. I just cant wait to see how Madigan Cullerton and Quinn make these changes and pass the blame to others. No matter what all three will be going to labor with their hand out looking for campaign money
Comment by fed up Wednesday, Mar 16, 11 @ 10:18 am
As an employee of the state (educator), I’m HAPPY to pay more into my pension (in addition to my already generous bi-monthly contribution of 9.5%). I would only ask that the state then up their ante, and increase what they have been legally required to do (and have NOT ) for some time.
Comment by Burnham Wannabe Wednesday, Mar 16, 11 @ 10:26 am
Cassandra - Government jobs were never golden. I do read the papers. If they touch the pension for current employees, I’m going to retire, and I’ll get a job in the private sector. That long, long line of people waiting to take my position can do so. I’ll bet they’ll want more current compensation than I’m making now, or they’ll just get it in the private sector. It’s the total compensation package that people consider when accepting the annual contract that’s offered, if you decrease compensation on the back end (pensions), people will want more money up front.
Comment by PublicServant Wednesday, Mar 16, 11 @ 10:31 am
So you blow off your own pledged contributions year after year then you ask the other guy, who has been kicking in the pledged amount, to ante up more when you come up short again?
No deficit of chutzpah in the SOI. For those who have been clamoring for Illinois to be run more like a business, well, that’s how big business rolls in this country these days.
Comment by wordslinger Wednesday, Mar 16, 11 @ 10:32 am
@ Wordslinger:
That’s what I’d want something more compelling to require the state’s contribution. Another “sure… we can do that (wink wink)” isn’t good enough. It would have to be something iron-clad.
But I think we, as members, need to be willing (and are ready to) do something in return to help the state. Give to get, you know? Sure, we’ve done our part and given A LOT, but it would be a great gesture to the public, not to mention a measure to save our pensions (as many people in this state want to turn them into defined benefits).
I’d be happy to pay a little more, as long as there is something sincere and ironclad coming from the state. Perhaps that’s foolish thinking, but hey, we can hope, right?
Comment by Burnham Wannabe Wednesday, Mar 16, 11 @ 10:38 am
Not to get all Matewan on everybody, but turning worker against worker is a classic hard times diversion tactic. “Hey look over there. That guy has something YOU don’t.”
Comment by Way Way Down Here Wednesday, Mar 16, 11 @ 10:42 am
To require me to pay 20% of my salary for retirement is ludicrous. I’m not arguing against the fact that some change has to be made but putting me into poverty is not the solution. You can bet I would be part of any lawsuit to stop such nonsense.
Comment by Demoralized Wednesday, Mar 16, 11 @ 10:51 am
As a state employee 6 months from reaching retirement age my biggest concern is having a bill pushed through in hours with no discussion or debate similar to last spring’s upping of new hires retirement age and benefit cuts. SERS better start hiring now to have enough people to handle the flood of new retirees that will show up the day after the bill is passed. Lot of good , experienced employees will be leaving earlier than planned rather than lose what was promise to them by our elected officials.
Comment by Roadiepig Wednesday, Mar 16, 11 @ 10:55 am
Welcome to Illinois, the state where they take the responsibility they have and push it on others. I would say it is very typical of Illinois to take something that they do not pay (their portion of the pension contribution) and then make those who have been paying faithfully to pay more. One thing people seem to not realize is that the money that was supposed to go to the pension system was spent on everyone else in the state through various social programs. So the people that got robbed from the pension contribution they should have received would now even pay more. It is like having to pay a burglar for stealing from you.
Comment by Welcome To Illinois Wednesday, Mar 16, 11 @ 10:59 am
They can’t change a thing for unionized workers until the bargaining agreement expires, which is over a year away for most. So, one more time, the Governor is giving his people pay raises and then “balancing” the budget on the backs of the handful merit comp workers left in state government.
Comment by Pat Robertson Wednesday, Mar 16, 11 @ 11:05 am
Dear Mr. Cross, Governor Quinn, and all the rest of the GA who have stolen from state emplopyees over the years- If I have to contribute more do I get more control over what you do with my money? Are you ever going to pay back what you took?
All of you folks who are so eager to make state government more like the private sector - What would happen to a corporation if they took money out of the employees pension system to finance projects such as building a new office or plant? I think the CEO and decision makers would be looking at some hard time. So start clamoring for an investigation and some penalities for the GA and administrations of the last three decades. No? Then you really don’t want to fix the problem you just want to dump on the state employees.
Comment by Irish Wednesday, Mar 16, 11 @ 11:08 am
===I think the CEO and decision makers would be looking at some hard time. ===
Don’t kid yourself.
Comment by Rich Miller Wednesday, Mar 16, 11 @ 11:09 am
word,
You are exactly right about any furor that may explode with this crud. As a state employee, I have contributed the share I was asked to and never missed a payment. The SOI has failed in its’ fiduciary duty and now wants me to bail them out. This is a fundemental failure on the part of the state, as well as federal gov’t. It tries to be everything to everybody by creating and expanding programs that require funding. The state then tries to pay for a billion dollar budget on million dollar tax receipts and ends up having to play some budget games. Between the Social Security “lock box” at the federal level and the poorly funded pension fund in Illinois you have one symptom of the problem with some gov’ts. I picture a starving dog chasing his tail. Whether he catches it or not makes no difference but he sure puts on a good show for everyone.
Comment by dupage dan Wednesday, Mar 16, 11 @ 11:10 am
===The SOI has failed in its’ fiduciary duty and now wants me to bail them out.===
Get in line, bub. What do you think that income tax was about?
Comment by Rich Miller Wednesday, Mar 16, 11 @ 11:14 am
Some government improvement group really should put up a historical Hall or List of Shame on the Illinois state pension issue. They could start with Governor Pat and whoever else voted for the last two fiscal years’ borrowed pension payments, the second, I believe, more expensive (for us taxpayers) than the first. But there is a long long list if culprits going back through the decades.
Comment by cassandra Wednesday, Mar 16, 11 @ 11:15 am
Yeah, Rich, I get to pay the income tax increase AND pay 20% of my salary towards a pension that was underfunded by the very jamokes forcing the increase. I am standing in 2 lines, not just one.
Comment by dupage dan Wednesday, Mar 16, 11 @ 11:20 am
–What would happen to a corporation if they took money out of the employees pension system to finance projects such as building a new office or plant?–
The senior officers would refurbish their offices (in expensive, if not good, taste), get their overpaid, laptop Board of Directors to give them bonuses, go into bankruptcy (or federal bailout, as the case may be), shed most of their pension obligations, then come out the other side and get more bonuses (if they hadn’t already got them from the bankruptcy judge).
See? Illinois is trying to operate more like big business.
Comment by wordslinger Wednesday, Mar 16, 11 @ 11:26 am
I have said it before - as a state employee I am willing to kick in a fair share to help with the budget mess. We can complain about how we got here and who’s to blame. That won’t change what has happened. We can see that programs are being cut while the taxes have been increased. This is what many here have said needs to be done, me included. This will be a bitter pill for many folk in this state, not just for us state employees. The union will work hard to preserve what is already in place for the rank and file. Time will reveal the results. For many folk in this state there is no union in place to preserve the programs they have become dependent on. Funding for the disabled for instance. It’s going to be rough on them.
Comment by dupage dan Wednesday, Mar 16, 11 @ 11:27 am
Cassandra - The joke will be on you and the taxpayers. I am sure there will be a double line of people wanting my job when I, too, retire after 23 years to my “golden parachute” (for which I have paid into for all those years!!) Here’s the punch line: The state does not replace workers who retire. They haven’t for the past 10 years. The unofficial hiring freeze has decimated the state work force and will ultimately result in slower and worse service to you. You think it takes a while at the Secretary of State now? Just wait until 1/2 of those people retire and no one is hired to replace them.
Comment by Anonymous Wednesday, Mar 16, 11 @ 11:46 am
All this bull is unconstitutional and vaught, quinn, madigan,and cullerton know it. The effective date for Cross’ bill is 7/1/12 so get those resumes ready and start packing or stay and fight. Its your choice.
Comment by Bill Wednesday, Mar 16, 11 @ 11:58 am
On numerous occasions, Rich and I have argued the issue of converting all state employees from defined benefit to defined contribution retirement plans.
Rich’s most compelling argument (at least in my opinion) is the fact that it would cost the state marginally more to contribute to Social Security and matching 401k contributions.
I believe my best arguments are that employees would own and be responsible for an asset that results from their hard work (one which can be willed to heirs) while still being secure (plans could have various different risk options from money markets and fixed annuities through emerging market funds) while eliminating this slush fund that is just too irresistible for politicians to abuse. State budgeting becomes much simpler because state contributions are well defined, and are based only on the size of the government workforce and not on past employee numbers and politically promised returns. Double dipping is completely eliminated, at least for those who are not holding concurrent positions.
So here we stand, with a wedge being driven between state workers and tax payers by politicians who, realistically, will always act in their own best interests to the detriment of the employees and constituents and anyone else who gets in the way of their quest for power.
It is time to take the pension problem out of political discourse and transition the current fixed benefit pension program to one based on fixed contribution. It will take a generation to fully complete, but the time will be well spent.
Comment by Cincinnatus Wednesday, Mar 16, 11 @ 12:00 pm
Well if they want me to fork out 20 percent for my retirement due to their poor managementhe gov. To cut 20 percent . I expect the gov. To cut 20% of its budget. As a state worker, I can cut 4million out of my facilities budget with no problem. Imagine how much they could cut in Chicago with all of those little pet projects….
Comment by ironman Wednesday, Mar 16, 11 @ 12:06 pm
Really, why stop at 20%?
I dont get it. If you want to push people out of the pension plan, and it is ok to change contribution levels, why not just make the level 50%, or, 100%? Or even 150% of salary must be contributed.
What’s the difference? I guess for those a year or two from retirement maybe it makes a difference, you pay your 20% for a year or 2, then move on, but for anyone younger…
And yes - most remaining MC with any marketable skills (the ones actually worth keeping) will be out the door, dont kid yourself.
But MC people who are going to be heading out the door - dont kid yourself either - no one cares.
Comment by Peter Snarker Wednesday, Mar 16, 11 @ 12:08 pm
These proposed changes apply to all retirement systems of course, Right? The GA system and the Judges system. Right? They wouldn’t just impose these on the regular workers and not the elite groups, would they?
Comment by Irish Wednesday, Mar 16, 11 @ 12:18 pm
Sorry for the double post - but examine, shall we, the life of an, oh, let’s call our person a MC CPA, or attorney, or engineer, or a nurse, working for the great state of IL:
MC - no raises for about a half-decade to a full decade (see inflation note below). Check.
24 furlough days (who knows next years #) - which is roughly a 10% pay cut. Check.
Under the (proposed) pension increase bill - 20% pension contribution (for many MC, that’s a 16% increase over current). Check.
Inflation - let’s just call it a very tame 2% per year at the moment. Check. (see note above for how many years you havent kept up with inflation).
State Tax increase - from 3% to 5% (2% more of salary, gone). Check.
Let’s not even factor in the ignored cost-of-living differences between Chicago/Suburban state employees and downstate - not accounted for.
Ok, so adding it all up, year-over-year, our MC highway engineer, our MC CPA, our MC attorney, that person is looking at almost 33% less purchasing power.
Folks - just to be clear - this isnt a pouting “boo-hoo” thing, or a “threat” to look for work elsewhere - it’s a financial necessity and obligation to look for work elsewhere.
Again - I dont mistake that for suggesting anyone cares.
Comment by Peter Snarker Wednesday, Mar 16, 11 @ 12:25 pm
Well, I’m sure, Anonymous, that plenty of citizens will apply and want the job. But what some will be in for a rude awakening for though is how hard it has become to actually perform the ‘job’ with what little money and employees are left here in the sticks on the frontline where us wee folk actually try to get it done day after day. Before accused of overstating and/or being a drama queen, come on out and spend a few weeks with us. There’s not been a new employee out here in my world in like 15 years and plenty are retired and/or laid off in those years.
Meh. Retirement in 15 months is not what I had planned on but 20% plus SS on top of it is a bit too much (even for Mr. Cross) to think is appropriate and realistic. Let’s see, another 15 months will be 35 yrs in, a nice kitty hoarded to cash in ( I was very thrifty with my time), less headaches and a few less aches and pains from laboring what has become impossible with what little is left out here. Yeah, Jr. Next can have at it. Nothing but good wishes towards him/her.
Of course I won’t be going out with a huge ridiculous pension that Cass and others seem to think I’ll get…those don’t exist in my little world…and with current life expectancy standing at 77 yrs, I won’t reap anywhere near what some assume I will. Fact will take multi plus years to even receive what higher ups will get each and every year…but it’s what I signed on for and am happy to have. It’s just two yrs short of what I had planned so I’m not going to lose much sleep over fretting about it…that fight will be for the others to do, I’ve fought my way through 30 plus years already. I’ll miss you all.
Comment by Cindy Lou Wednesday, Mar 16, 11 @ 12:30 pm
When the state created budgets over the past years, they set aside an amount for state employees. That money could have gone to pensions or wages. The unions wanted more put toward wages.
All of you state employees on this blog should have complained to your union bosses, or voted them out of office, if you were concerned about your pensions. Did anyone complain about the “record setting” wage increases Blago gave to the unions as soon as he was elected? Or Ryans sweetheart early retirement boondoggle?
Stop pointing the finger at everyone else and take your share of responsiblility for this mess!
Comment by John Parnell Wednesday, Mar 16, 11 @ 12:36 pm
Ok John.
Enough fantasy. When the facts don’t support your distorted little view of the world you just make stuff up. I think you’d be much happier in Wisconsin. You might even get elected to office.
Comment by Bill Wednesday, Mar 16, 11 @ 12:43 pm
That agrument, Mr.Parnell, only holds so much weight. At the rate employees disappeared out here I’d wager it more than covered increases in salaries plus for those few left.
Comment by Cindy Lou Wednesday, Mar 16, 11 @ 12:44 pm
Bill- How do you think budgets are created for the state? There was only so much money for state employees, and it was divided up with the Union leaders having input at the table. Union leaders representing you!
Comment by John Parnell Wednesday, Mar 16, 11 @ 12:52 pm
Cindy Lou - Either you mis-read my comment or I am mis-reading yours. You sound as though you are a state worker who has been working with less - staff, budget, etc. for a long time. Me too. In fact, my point to Cassandra was exactly that - it will only get worse when all those who can retire do so.
Comment by Anonymous Wednesday, Mar 16, 11 @ 12:53 pm
Mr. Parnell, please refresh my memory. Which administration came to the bargaining table and offered the union a full funding of the pension, instead of salary increases?
Comment by A Voter Wednesday, Mar 16, 11 @ 12:56 pm
Hey John many of us aren’t in unions, and, as I said, if they touch the pension, even though I’m pretty sure we’ll win in the courts, I’ll retire before the law’s effective date, and get a job in the private sector, where I’m already consulting.
As for double-dipping, they could ask me to come back to help train the new guys to do my job (oh yes, it will most likely take more than one), but since that’s limited to my monthly pension payment, that’s not going to happen.
I wish them (and you) luck with your short-sighted views of reality.
Comment by PublicServant Wednesday, Mar 16, 11 @ 12:57 pm
John Parnell:
If you cannot tell by my above posts - I am not in the union, nor do I believe that myself nor any of my “marketable” MC brethern will be sticking around anyway. We’re not idiots and as the line goes, it doesnt take a weatherman to know which way the wind is blowing… that said…
My honest understanding is the state came to the table, as you would have it, saying it had one pill of money for the pension and another pile of money for salary. The union agreed and the state systematically reneged for the better part of 2 decades.
That said - if your point is that regardless of what the state said it would do - the reality was clear for anyone to see, such as union leaders - that the pensions werent being funded and they should have done something… maybe you do have a point there.
Essentially, you are accusing the state side of negotiating in bad faith (never intended to fund its contractual obligations) and the union went along with it b/c it was more expedient at the moment.
Hmmm. Could be, could be.
Comment by Peter Snarker Wednesday, Mar 16, 11 @ 1:02 pm
Pete, the state was already shortchanging the pensions before 1970. That’s why it was written into the constitution, so your two decades becomes four decades plus.
Comment by PublicServant Wednesday, Mar 16, 11 @ 1:10 pm
==if your point is that regardless of what the state said it would do - the reality was clear for anyone to see, such as union leaders - that the pensions werent being funded and they should have done something… maybe you do have a point there.==
Yes. A very good point, indeed. The state’s politicians have behaved in a contemptible manner when it comes to pension funding, but they are clearly not the only actors in this sad drama with blood on their hands.
Comment by Responsa Wednesday, Mar 16, 11 @ 1:20 pm
“- Irish - Wednesday, Mar 16, 11 @ 12:18 pm:
These proposed changes apply to all retirement systems of course, Right? The GA system and the Judges system. Right? They wouldn’t just impose these on the regular workers and not the elite groups, would they?”
Irish- excellent point. Don’t forget University employees– there are lots and lots of high price tag folks there, too, that somehow seem to be forgotten in state budget debates.
Comment by Anonymous Wednesday, Mar 16, 11 @ 1:31 pm
The only regular encounter I have with the Secretary of State is at the DMV and I’ve always been able to conduct my business quickly with pleasant staff so the horror-to-come allusion made earlier in this thread doesn’t resonate with me.
Nor do the ‘I quit!’ threats. If you honestly think there’s a robust job market out there and that you will be able to skip into a new and better paying job, think again.
There are a lot of people who would love to have your jobs. Heck, I’d love to have your job. Any job. And that’s kinda the point: a lot of smart, hard-working people remain involuntarily unemployed and see your troubles not as troubles but as a substantial improvement over their own, dire situations.
I don’t say this to justify bum policymaking or the cowardly politics that promise today what won’t—or can’t—be delivered tomorrow (an indictment that applies to more than just elected officials, btw) but to offer a different perspective, one from a citizen who values the work that state employees do but who also finds the foot-stomping, I’m-out-of-here chorus disingenuous and out of touch.
Comment by Indeedy Wednesday, Mar 16, 11 @ 1:31 pm
Responsa,
Right-o. You are pointing out two problems with one post. One is the obvious underfunding of pensions, which I believe can be addressed with a phased in change to defined contribution retirement programs.
But the second thing you point out is even more interesting; the inherent conflict of interest between elected politicians and public service employees unions. Is there any wonder that the contemptible behavior is spread around. Even the taxpayers must assume their share of responsibility, allowing these irresponsible elected officials to continue in office.
Comment by Cincinnatus Wednesday, Mar 16, 11 @ 1:34 pm
Anything on Cullerton’s proposed legislation to repealthe Vidoe Gaming Act provisions?
Comment by Quinn T. Sential Wednesday, Mar 16, 11 @ 1:49 pm
Indeedy -
I agree from a general point of view - obviously if we could all just say “I quit” and go to that great job at the Big Rock Candy Mountain CPA firm we would have. I happen to believe that people are rational actors. I TOTALLY understand the idea that “I quit if my great benefits and amazing job stability is even decreased in the slightest” is WAY out of touch.
What’s more, many state workers will probably calculate that, in the end, the pension is close enough in terms of years to be worth sticking around for. They’ll never quit and everyone knows it.
Then there is another group who isnt marketable and wouldnt thrive in a private-sector setting (it’s different). Absolutely.
But per my above post - it isnt a huffing-puffing “I quit!!”, it’s really a rational thing to look for another job, if you are marketable, when your year-over-year purchasing power decreases by almost a 1/3…
… in a nation of blind people a one-eyed man is king, ya know?
But I do agree generally with your point - but there is another reality too, and that is those with talent and not withing spitting distance of their pensions will be gone.
That was my only point. Not to the state at large, or readers at large - I concede no one gives a crap. More a wake-up call to my non-union MC brothers and sisters - guys, start making yourself marketable.
Comment by Peter Snarker Wednesday, Mar 16, 11 @ 1:49 pm
I don’t know where to begin …
Current SURS employees contribute more but they also have a more generous retirement, both in percentage earned per year and an earlier age they can retire … that’s part of why SURS employees do contribute more.
Defined contribution - doesn’t solve the existing pension debt … you still have the already retired plus the people currently in the system(s) with the existing underfunded liability. You will still have to pay the huge State contributions that need to be made (and aren’t) today.
Saving money with new hires - ain’t going to happen for one of three reasons … pick your favorite bias. (1) Anybody who can hit the “rule of 85″ will be gone. You’ll still have to pay the new retirees what they were promised, and sooner than you normally would have, so the contributions in will be smaller and the length of payout will be longer. (2) New hires, if any, will want more money because they aren’t getting the other benefits. (3) New “hires” will (more likely) be contractors at a much higher cost but no benefits. Contractors aren’t stupid; they have to pay their own expenses and figure that in to the rate they charge. But contractors have some advantages that politicians like: they don’t “count” in the state head count (so you can have good PR about cutting) and contractors can be “asked” to make campaign contributions. You will notice both those words are in quotes … assign your own meaning … I’ve been on both sides of the fence and know what they mean to me.
Charging ridiculous contribution levels (beyond actuarial levels) - sounds like the State will be one the losing side of yet amount lawsuit with futher waste of taxpayer’s money.
Finally, the State has a long history of reneging on any deal with employees. Anybody remember when SERS employees agreed to fore-go raises in exchange for the State picking up their 4% contribution? Didn’t last for very many years did it? And then the MC people got the short end of the deal - no raises - while the union people were given several back to back 6 months apart if I remember correctly) raises to cover their “new” pension payments where the state reneged. If I was still working, I would want anything the State promised as another Constitutional amendment so the State couldn’t change their mind next year.
Comment by Retired Non-Union Guy Wednesday, Mar 16, 11 @ 1:50 pm
Ideedy,
Last Saturday I spent an hour in line at the DMV to renew two license plates …
Comment by Retired Non-Union Guy Wednesday, Mar 16, 11 @ 1:52 pm
Retired Non-Union Guy-even if its in the constiturion, it does not seem as if our “esteemed” politicians will honor it. If they did, the pensions would not be underfunded.
Comment by wizard Wednesday, Mar 16, 11 @ 2:00 pm
Indeedy - The point isn’t “I’m gonna run away and then they’ll be sorry”. The point is it those who retire WILL NOT be replaced. Therefore, it doesn’t matter how many people are willing to take my job or for how much. NO ONE will get it. It will just go unfilled, as will almost all other vacated positions.
Comment by Anonymous Wednesday, Mar 16, 11 @ 2:01 pm
that should be constitution not constiturion-my bad
Comment by wizard Wednesday, Mar 16, 11 @ 2:02 pm
Wizard,
The current clause just says the State has to pay it … it is silent on how / when they fund it.
Comment by Retired Non-Union Guy Wednesday, Mar 16, 11 @ 2:02 pm
Changing the subject - vouchers - good idea. I’ve always been for them; let’s give one to every student in the state and let the schools compete for the students. I’ve also suggested in the past that we cut way back on college funding so we can properly support primary and secondary levels of education.
Comment by Retired Non-Union Guy Wednesday, Mar 16, 11 @ 2:23 pm
Unconstitutional - Breach of Contract - Fraud - -Flat out Wrong ( does not affect me directly but anger is the reaction , nonetheless )
Comment by x ace Wednesday, Mar 16, 11 @ 2:30 pm
“House GOP Leader Tom Cross has a bill that would hike current employee pension contributions to 20 percent of salary.”
Haven’t read all the previous comments, but I’ll say this. Some snark? Or not?
Right now, I’m guessing that taxes, between income and every other, in one of many additional forms or another probably account for 1/2 or more of my total gross. As a public employee, now they want 20% more, or thereabouts. Maybe they should just decide to give me 20% CLEAR; I’ll probably be better off?
Comment by sal-says Wednesday, Mar 16, 11 @ 3:03 pm
The whole state pension crisis is best summed up by Otter: you F’ed up… you trusted us. State employees made the mistake of believing the folks in charge would actually keep their promises and properly fund the pensions.
Comment by Angry Republican Wednesday, Mar 16, 11 @ 3:03 pm
Wordslinger & others with him are right on. 20%? That’s nutty! I’d like to see a chart of the governor’s and legislative pension plans. How long to be vested? What’s the contribution? When will “shared sacrifice” include RESTRAINT on spending programs to attract votes and some INTEGRITY to first live up to fund pension contributions by the state? Any pension reform should first and foremost REQUIRE the state to pay it’s portion of pension funding annually, before discretionary spending.
Comment by JustaJoe Wednesday, Mar 16, 11 @ 3:21 pm
Everyone, have been out of town and not able to be on the blog. As always, I appreciate the discussion on this issue. I am trying to get my thoughts together and get back into the mix.
Comment by Truth Seeker Wednesday, Mar 16, 11 @ 3:24 pm
Read all the comments; here’s my current take.
- Cincinnatus -
“State budgeting becomes much simpler because state contributions are well defined, and are based only on the size of the government workforce and not on past employee numbers and politically promised returns.”
> So, the pols won’t ever find a way to short-sheet these contributions? Hmmmm.
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- Peter Snarker -
“Under the (proposed) pension increase bill - 20% pension contribution (for many MC, that’s a 16% increase over current). Check.”
> Actually, that 16% is four (4) times the current rate. An increase of 400%.
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- Cindy Lou -
Great commentary !!!
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- John Parnell -
“Stop pointing the finger at everyone else and take your share of responsiblility for this mess! ”
> Thanks, man. I just KNEW it was MY fault.
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- Indeedy -
“The only regular encounter I have with the Secretary of State is at the DMV and I’ve always been able to conduct my business quickly with pleasant staff so the horror-to-come allusion made earlier in this thread doesn’t resonate with me.”
> You ain’t seen nothin’ yet, friend.
—————
- Peter Snarker -
“I concede no one gives a crap.”
> Maybe we all will when the services we’ve all come to depend on and expact aren’t there any longer.
Just sayin’.
Comment by sal-says Wednesday, Mar 16, 11 @ 3:56 pm
sal-says,
The contributions are made in real-time (at worst quarterly), and aren’t held in some promissory trust fund that is to be paid out at some date long in the future. To withhold funds would be a federal crime.
Comment by Cincinnatus Wednesday, Mar 16, 11 @ 4:51 pm
For current contract employees and pensioneers, the state and U.S. constitutions seem clear. You pay what you promised.
It galls me to no end that lower-middle class wage-earners somehow wear the jacket for the obscene and pornographic (in clear view) destruction of the world economy by high finance, gambling low lifes.
By the way, no one’s missed a pension check yet. And I remember about thirty years ago when, as a young, good-looking man, Social Security was broke, we were out of oil and in the midst of a New Ice Age.
So don’t get rattled too much by the acturial hype. By Malthus’ calculations, we never would have made it this far.
The Constitutional pension guarantees can be challenged, of course, which is why this country is crawling with an unusually high number of lawyers and judges.
But on a moral level, we all know what we’re talking about. A contract is a contract, a promise is a promise. Not difficult at all. Sober up, pay up, move on.
And please, those who are angry out there still, ask yourself a question: who walked away with the money? Direct your anger there.
Comment by wordslinger Wednesday, Mar 16, 11 @ 5:00 pm
So they want mess with pensions and cut Dhs budget but vaught gives raises and exemption budget office from furlough days???
Comment by Wow Wednesday, Mar 16, 11 @ 5:15 pm
Sal - 400 percent is correct, my point was attempting to show of every dollar in salary the state is all told proposing to take back an additional 2 cents in taxes, 20 cents in pension contribution, 10 cents in furlough.
I said for many that is not affordable, regardless of whose fault, when the problem started, etc.
The reality, family budget wise, not blog world, is that those who can will leave. Those who can’t will opt out of the pension, which is the point.
Comment by Peter Snarker Wednesday, Mar 16, 11 @ 5:39 pm
For Peter Snarker “and” sal-says…
Increasing pension contributions from 4% to 20% is a 500% increase…check!
For all you others that will be standing in line for the jobs when a lot of us will retire soon, bring something to read. In my support bureau, our headcount has dropped 75% over the past 10 years and we still support the entire agency, where the total headcount is down 15-20%.
Two things:
1. When someone leaves, the remaining people are brought in and given the work of those who left. In my agency, it is rare that a union-titled job gets filled anymore.
2. The remaining people in my bureau don’t get any new projects finished because we spend all of our time doing support.
This isn’t isolated as I hear friends that work in other agencies complain about the same thing. As Blago said, “Do more with less!” And he meant it.
Talking with my group, 40% say they will definitely retire if Cross and the others pull off what they’d like to. I personally will be leaving next year, sooner if the climate gets uncomfortable. For those of you waiting to fill these jobs when we leave, don’t hold your breath, unless you have political pull of course! This “is” Illinois isn’t it?
Comment by Fed Up State Employee Wednesday, Mar 16, 11 @ 5:40 pm
The 20 % figure is an attempt to finds the line at which in reality everyone more than a year or two from retirement opts out, but simultaneousl passes court muster down the road as being reasonable.
It is a very delicate balance!
Comment by Peter Snarker Wednesday, Mar 16, 11 @ 5:47 pm