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* I told subscribers about these numbers yesterday, but here are the new proposed salary percentages for the pension reform plan…
Under the proposal, the General Assembly will pay roughly 25 percent of their salaries into the pension system. Teachers will pay 13 percent and state employees will pay 14 percent, said state Rep. Kevin McCarthy, D-Orland Park, who did not have figures on hand for university employees. The percentages are pending lawmakers’ approval.
Today, lawmakers in the General Assembly pay 11.5 percent, teachers 9.4 percent, universities 8 percent and state employees 4 percent or 8 percent of their salaries into their pension.
As of Sunday, McCarthy did not have numbers for state workers who are also in the Social Security program. So, I’m not totally sure about that 14 percent number in the ISN story.
* Judges are not included in the bill…
State Rep. Jack Franks, D-Woodstock, said the measure likely will be ruled constitutional because despite asking people to pay more, it doesn’t necessarily give people reduced benefits. He said a ruling either way would set a precedent.
“But (judges) better be careful what they wish for, because if they do rule that it is constitutional, then nothing would be barring us from next year of doing the same thing to them,” Franks said. “So I think it’s just a political calculation on the part of the sponsor. Frankly, I would have just left them in.”
* Former Gov. Edgar has some reservations…
Former Illinois Gov. Jim Edgar said he fears changes in the pension payments might deter future employees from having long careers in state government.
“Is that going to cause an exit of quality people in state government?” Edgar asked. “We already have a morale problem with state workers. We’ve lost a lot of good people, and we can’t afford to lose more people.”
* Meanwhile, the “We Are One” labor coalition has a new radio ad opposing the plan. Rate it…
Script…
The politicians in Springfield are at it again.
This time they’re playing with the retirement security of our teachers, police, firefighters, caregivers and other public servants who help our community every day.
80% of these public employees don’t get Social Security. The modest pensions they paid for, and were promised, are their only life savings.
The fact is, most already pay 8% or more from every paycheck to fund their own retirements. They’ve never missed a payment.
They did their jobs. But the politicians didn’t do theirs. For years theyfailed to make the required payments.
And now that the bill is due the politicians want to go back on what they promised and force public employees to pay the price.
Tell the Springfield politicians to clean up their own mess. Don’t cut public employee pensions.
Go to We Are one Illinois.org to help, today.
This message paid for by We Are One Illinois.
posted by Rich Miller
Tuesday, May 17, 11 @ 5:43 am
Sorry, comments are closed at this time.
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There will be a lot of angst among state employees over the 14% figure but:
1. They already pay in 4 % so its really only 10%
2. It doesn’t go into effect until July 2012
3. The union members will be getting a raise of 3.5 % by then
4. So the net increase is 6.5% which is almost what they have received in raises for the past couple years.
So tier one is a very good deal.
Comment by cassiopia Tuesday, May 17, 11 @ 6:12 am
Actually, where I live, most school districts pick up the pension payments for the teachers. Teachers won’t see their paychecks decline a bit.
Promises mean squat when you don’t have the dough. Blood from a turnip and all that.
We Are One has to deal with reality. Just like the rest of us. Man up, guys and gals. You keep going on in the style to which you’ve become accustomed, you’ll really screw yourselves over.
IOU’s when you in your seventies are really going to suck.
Comment by Anonymouse Tuesday, May 17, 11 @ 6:15 am
Its sad to see all the pension envy individuals that post the crap like Anon 6:15am telling State Employees to man up and get in the real world. The real issue is no matter what the pension plans are that the state legislature put out there, they will never be funded because of the greed and corruption in our state government. Since Edgar state employees have been ask to do more with less and than watch as our inflation adjusted pay and pension funds continue to decline. During the so called Economic good times state employees did not get bonuses and higher raises tied to the economy boom. But now that everybody else is losing we need to lose too.
Comment by Rick Tuesday, May 17, 11 @ 6:39 am
===During the so called Economic good times state employees did not get bonuses and higher raises tied to the economy boom===
AFSCME’s last contract was hailed by the union itself as the best in the nation.
Comment by Rich Miller Tuesday, May 17, 11 @ 6:41 am
Where’s the clause that mandates the state make its contributions to the fund?
Comment by Wensicia Tuesday, May 17, 11 @ 6:47 am
Perhaps the impact will be blunted somewhat for unionized state employees. However there are thousands of non-union employees (including myself) who have NOT shared in the raises granted to union workers, but will share in the additional costs of the pension plan. This will likely mean, for them, substantial salary cuts.
If this bill passes, court challenge or not, one of the likely immediate effects will be that nearly all non-union employees who are within a year or two of retirement will jump ship at the end of this year. I know several people in my (very small) agency who are talking about doing just that. They were going to hang around another couple of years until they got full Social Security, Medicare, etc. but this may push them into leaving earlier than they would have otherwise.
Comment by Secret Square Tuesday, May 17, 11 @ 6:50 am
Is this a poorly done commercial or what. Looks like a bunch of angry, unpleasant people we are supposed to feel sorry for? Who did this ad? It is terrible!
Comment by anonymous Tuesday, May 17, 11 @ 6:52 am
Rich,
Quit trying to lump me in with AFSCME. Here are the facts on Public Sector vs. Private Sector compensation:
http://www.projo.com/opinion/contributors/content/CT_pub.31bb93e.html
Comment by PublicServant Tuesday, May 17, 11 @ 7:08 am
For me it would mean a 10% pay cut. That would really bite, but I guess I’d roll over and go along with it as long as it finally gets the target off our back.
Oh, and hopefully there will be some kind of guarantee that the money they withhold from our paychecks actually gets put in the retirement bucket.
Comment by Cornerfield Tuesday, May 17, 11 @ 7:10 am
I have to admit I think some of the complaints from the unions would have a little more sway with me if they fought harder to get the contributions made back in the day.
Funny I don’t recall TV ads against politicians when contributions from the state were coming up short nor do I recall them working against those who allowed it to happen.
Comment by Oneman Tuesday, May 17, 11 @ 7:42 am
I too am not in the union. I take home less pay today then i did 9 years ago. I guess I have to be greatful i have a job!
Comment by Just Because Tuesday, May 17, 11 @ 7:49 am
State employees did fight when the legislature didn’t make their required payment. Don’t use the excuse that you don’t think they fought hard enough to justify the use of funds that should have gone to the state’s share of pension funding, to pay for other state services that you either directly, or indirectly benefitted from without paying for.
They can either cut services/raise revenues, or any combination of the two in order to meet their obligation to state employees. Blame, however, doesn’t mattter, you pay your bills, I pay mine, and the state needs to pay theirs. Balancing the bill on the backs of the small subset of state employees is inequitable any way you cut it. Everybody needs to pay, not just state employees, for the fiscal mismanagement of their elected state representatives.
Comment by PublicServant Tuesday, May 17, 11 @ 7:56 am
I hope that the 14% figure is for state workers under the alternative formula (DOC). I think we can all agree that the teacher’s Tier I pension is much better than SERS Tier I (because they don’t get social security), so it seems unfair that state employees would be paying more than teachers for a lesser benefit. I think the alternate people already contribute 12.5% so then the 14% makes sense as a slight increase.
Comment by Anon Tuesday, May 17, 11 @ 8:07 am
I would like to know what the pension payment for this fiscal year would have been, if the pension fund was fully funded.
Comment by stateworker Tuesday, May 17, 11 @ 8:09 am
Raising the contribution does NOT relinquish them from having to pay the unfunded Liability. All this does is allow them more time to delay the money they owe.
Union workers will never see the raise they deferred. In fact it was not included in the budget. I think you are going to see a lot of people that meet the Rule of 85 leaving the state, unfortunately there will be a lot of years of knowledge leave with them.
Comment by He Makes Ryan Look Like a Saint Tuesday, May 17, 11 @ 8:10 am
The thing that really gets me about this whole sordid affair is the posturing of the Chairman, Kevin McCarthy. Kevin never hesitated, come election time, to beg the unions for contributions and support. Now that his political patrons and mentors, Rod Blagojevich and Jay Hoffman,are gone he sees the writing on the wall and suddenly becomes Madigan’s fair haired gofer and a lackey for the utility companies. This guy will stop at nothing in his quest for that lucrative job at the end of his legislative rainbow. He’s forgotten who put him where he is. It has always been all about Kevin.
Comment by Bill Tuesday, May 17, 11 @ 8:10 am
Is the 14% for State workers including the states supposed 6% portion. if not, that would mean any current state worker paying into social security would have their Pension Increased by 3.5 times. In my case i currently pay $120 per pay…if i am correct I woul dhave to pay $422 per pay under this legislation.
Comment by Anon 123 Tuesday, May 17, 11 @ 8:22 am
14% is an absolutely ridiculous number. I cannot afford a 10% pay cut. I’m not in the union so I have had no raises and have had to take furlough days. Enough is enough!!
Comment by Anonymous Tuesday, May 17, 11 @ 8:23 am
Sorry . . . that was me above
Comment by Demoralized Tuesday, May 17, 11 @ 8:24 am
Oneman,
Unions and individuals have indeed tried to compel the legislature to adequately fund the pension systems over the past few decades. More than once members of pension systems went to court to force the legislature to adequately fund State pension contributions, eg People ex rel. Illinois Federation of Teachers v. Lindberg (1975) and People ex rel. Sklodowski v. Illinois (1998).
The rulings have been that the constitutional pension protection clause creates a contractual basis for receiving the benefits but it does not obligate the legislature to specific levels of funding during any fiscal period. (My reading as a non-attorney).
Comment by east central Tuesday, May 17, 11 @ 8:30 am
PublicServant I don’t recall a single ad, mailer, etc about it. Also when AFSCME negotiated the last two contracts (at least) they could have made that part of the contract. Did they?
They worked to get Rod elected and re-elected, the king of pension tricks. But now that it may impact their members (instead of me the taxpayer) now I see the TV ads.
Comment by OneMan Tuesday, May 17, 11 @ 8:31 am
Rich or anyone, will these cost sharing percentages be able to change during future collective bargaining processes?
Comment by Truth Seeker Tuesday, May 17, 11 @ 8:50 am
Noted in the post: Former Illinois Gov. Jim Edgar said he fears changes in the pension payments might deter future employees from having long careers in state government… “We already have a morale problem with state workers. We’ve lost a lot of good people, and we can’t afford to lose more people.” The former governor is correct…know that the professionals that state citizen deserve representing their interests on a range of issues will be disinclined to join or stay with public service…they will be replaced by more costly, transient, and profit-oriented others, or with people who can’t get employed elsewhere.
Comment by JustaJoe Tuesday, May 17, 11 @ 8:52 am
I am going to go out on a limb here and guess you are not going to be paying $422 x 5 x 52 = $109,720 for your pension contribution each year even if you are an assistant school superintendent.
Comment by OneMan Tuesday, May 17, 11 @ 9:03 am
Oneman, I fail to see your logic here. Anecdotally, YOU failed to see any ads, mailers etc…so what. Are you saying that the lack of as vociferous a response as you deem necessary against the state’s not paying the money they owed into the pensions absolves you of the responsibility to pay your bills, and to attempt to lay that entire burden on the backs of state employees? Blaming the victim because their “No” was not loud enough (in your opinion), in no way lets you, or any other person off the hook in paying their share of the financial hole the state finds itself in today. They’re our representatives, you and I elected them. Quit trying to place the blame, and the cost of shouldering that burden on the very people who were victimized the most, who footed the bill for those state services, and who now want to be paid back for the funds used without their permission to pay for those services.
Don’t front any bogus excuses that seek to justify, or somehow absolve you from paying for the state’s mess. Pay your bills, and quit trying to shift the entire burden to state employees. Oh, and even though the unions are convenient whipping boys, I’m not, nor ever was, in a union. Man up. If you don’t want to spread the burden of paying to a much larger group of people that includes you, just say so. Don’t hide your abdication of responsibility behind a bogus argument.
Comment by PublicServant Tuesday, May 17, 11 @ 9:04 am
===Where’s the clause that mandates the state make its contributions to the fund?===
That would be my concern. It is unscrupulous to requrie state employees to throw even more money down the pension rat hole. Until the state makes a real commitment to paying their share, state employees should not be required to increase their contribution.
Comment by Slick Willy Tuesday, May 17, 11 @ 9:06 am
I don’t know paying more than10% seems crazy i guess each union is going to get a seperate deal. I just hopethat their is something that forces the state to pay it’s share in to the pension funds. The leaving the judges out is something that should offend everyone a thinly veiled attempt to make it pass a court challenge.
Comment by Fed up Tuesday, May 17, 11 @ 9:09 am
Former Gov. Edgar has some reservations…
If Former Governor Edgar wants to comment why doesn’t he suggest an alternative solution?
Comment by downstate hack Tuesday, May 17, 11 @ 9:16 am
I don’t see why elected officials should have a pension plan at all. They shouldn’t be there that long. Social Security + 401(k) or equivalent, with possibly a small match, and we’re done with that one.
Comment by Excessively Rabid Tuesday, May 17, 11 @ 9:18 am
“already lost a lot of good people”.
1. given the economy I am sure there are actually a lot of people trying to get state jobs.
2. given the awful state of the state, we won’t miss these MVP bureaucrats moving on.
3. As a republican it’s disappointing that he would favor this kind of spending over other areas and this is one of many reasons conservatives didn’t trust his former chief of staff.
4. the former governor is wrong, people should not take government jobs for financial benefit, they’re there to serve the public, not get rich.
Comment by Shore Tuesday, May 17, 11 @ 9:18 am
Shore,
Public sector workers are here to make a living also. I didn’t sign up to be your slave.
Comment by Demoralized Tuesday, May 17, 11 @ 9:22 am
Billionaire tycoons who scam and sink our economy with derivatives have successfully turned the financial fear and anger toward those along side us and away from those above who caused the economic collapse. The comments above reflect that old story; a fight between worker-vs-cheaper worker. There were no drastic benefit cuts proposed when the Clinton economy had revenue soaring, with TRS funded at 63% and SURS at 90%. Politicians who for years under funded pensions (recall two pension holidays with Rod)now demand workers bail out those mistakes. There are other answers. For one, taxing high income retirement earnings (like Eden Martin’s)and rolling the money into the pensions unfunded liability is a good start.
Comment by anon-non Tuesday, May 17, 11 @ 9:23 am
–“Is that going to cause an exit of quality people in state government?” Edgar asked. “We already have a morale problem with state workers. ”
I haven’t noticed a lot of people in the private sector spontaneously breaking into joyful song over their anxieties about holding onto their jobs, stagnant wages, burgeoning accounts receivables and whacked 401Ks.
I empathize with public employees, but there’s a lot of poor morale all over. It’s been pretty dreary in the private sector for quite some time now as well.
Where are you going to go? Not everyone who leaves state government can become a lobbyist or serve on corporate boards. It’s still pretty rocky out there.
Comment by wordslinger Tuesday, May 17, 11 @ 9:24 am
Shore,
With the average state worker pension of 33k per year, I would say that they ARE serving the public and NOT getting rich
Comment by Unreal Tuesday, May 17, 11 @ 9:26 am
I too am not in the union - I cannot remember the last time we got a real raise - even though we are paid with federal funds. My earning power to day adjusted for inflation is less then when I said yes when the state called me in 1984. I am one that will retire - commuting in Chicago is just to expensive - until then I will continue to try to bring federal $ to Illinois.
Comment by sadie Tuesday, May 17, 11 @ 9:26 am
“this kind of spending over other areas”
By “this kind of spending”, do you mean paying your bills for those “other area” services that were provided with state employee pension fund money that you’re now trying to weasel out of paying back?
Comment by PublicServant Tuesday, May 17, 11 @ 9:35 am
and from the journal register - for non-union
Illinois’ top political figures would have to take 12 furlough days during the next budget year under a bill approved by the Senate Executive Committee Monday.
The bill also prohibits cost-of-living pay increases for lawmakers beginning July 1 and cuts daily expense money paid to lawmakers while they are in Springfield.
Sen. Dan Kotowski, D-Park Ridge, said the reductions are the same as those in place for top officials this year. It will save the state more than $1.2 million next year, he said.
The 12 furlough days apply to state lawmakers, statewide elected officials and top management at state agencies, including directors. For state lawmakers, who make a base salary of $67,836 annually, the 12 unpaid furlough days amount to about $3,119.
The bill limits daily expense money for lawmakers while they are in session to $111. That is the same as this year, but below the roughly $140 that was paid two years ago.
The bill goes to the full Senate for consideration. The House last month approved a bill cutting lawmakers’ pay by 10 percent. That bill is stalled in a Senate committee.
Comment by sadie Tuesday, May 17, 11 @ 9:36 am
“people should not take government jobs for financial benefit, they’re there to serve the public, not get rich.”
Of course, ideally, no one should take ANY job, public OR private, purely to “get rich” without any thought for performing the job itself or serving the public/customers/clients.
Still, the only people I can think of who could take a job with no consideration of the “financial benefit” would be 1) monks and nuns with strict vows of poverty or 2) people with another source of income (inheritance, investments, gainfully employed spouse, etc.) that relieves them of any concern about keeping food on the table or a roof over their heads.
Comment by Secret Square Tuesday, May 17, 11 @ 9:37 am
sadie
A state Senate panel on Monday passed a plan requiring General Assembly members to take 12 furlough days for fiscal year 2012, which starts in July.
However, the same proposal, SB260, includes the “additional amounts per year” for other lawmakers — committee chairmen and committee minority spokesmen and spokeswomen.
The lump-sum appropriations in the proposal would increase pay for Senate committee chiefs by 14 percent. House committee bosses would see a 47-percent jump in pay. These increases are on top of the base $67,836 annual salaries that all lawmakers earn. Committee and leadership posts bring extra pay.
Comment by Unreal Tuesday, May 17, 11 @ 9:42 am
Shore–Experienced Engineers, food inspectors, environmental inspectors have all left and will continue to leave think about that when you drive over a bridge, drink water, eat food.
It would be interesting to see how you live compared to the AVERAGE state employee.
Comment by He Makes Ryan Look Like a Saint Tuesday, May 17, 11 @ 9:51 am
“The fact is, most already pay 8% or more from every paycheck to fund their own retirements.”
Boo Hoo. I pay over 20% and have *no* guarantee of any sort.
Demoralized: “Public sector workers are here to make a living also. I didn’t sign up to be your slave. ”
Quit, if you think you can get a better deal in the private sector. My benefits have been cut in my private sector job; I’ve gone multiple years making less money than the year before. It ain’t easy for any of us.
Comment by Chris Tuesday, May 17, 11 @ 10:02 am
Shore - you are a pompous son of a gun aren’t you?
Comment by Irish Tuesday, May 17, 11 @ 10:13 am
When Edgar was governor, AFSCME worked out a deal that gave employees a 4% raise and required members to begin paying 4% to SERS. We also got a one time “payment” of $500 each. That let the state forgo raises for two years. Why don’t they just do something like that again? Implement the pay raises, then require that amount as additional payment towards SERS?
Comment by lincolnlover Tuesday, May 17, 11 @ 10:18 am
The class war rages on with the peons fighting over the crumbs while the billionaires laugh all the way to the bank.
Chris,
Instead of being envious and begrudging hard working, underpaid state employees their retirement security, why not begin to fight to get your own? We’re all in this together except for rich kids like shore and millionaires like Eden Martin and billionaires like the Pritzkers. Every worker in Illinois deserves retirement benefits. Lee’s try to raise all ships instead of fighting amongst ourselves while the rich get richer and refuse to pay their fair share. If you want to resent someone, resent them not your neighboorhood beat cop or garbageman.
Comment by Bill Tuesday, May 17, 11 @ 10:23 am
Bill
Amen, brother!
Comment by lincolnlover Tuesday, May 17, 11 @ 10:35 am
For once Bill is correct.
I think that the union officials need to be lumped in with the rich as well. Their salaries and benefits definitely separate them from their members and a little more publicity about that is needed.
Comment by cassiopia Tuesday, May 17, 11 @ 10:45 am
There is some truth to what you say, Cass. I can check on line to see what the Governor makes, but I have no idea what Henry Bayer is getting.
Comment by lincolnlover Tuesday, May 17, 11 @ 10:52 am
“For once Bill is correct.
I think that the union officials need to be lumped in with the rich as well. Their salaries and benefits definitely separate them from their members and a little more publicity about that is needed.”
Agreed. It is sickening to see the millions of dollars unions throw at elections as well. If union officials really want to help their members, why not stop the political spending and cut membership dues? That would help offset the pension contribution increase.
Comment by Anonymous Tuesday, May 17, 11 @ 10:56 am
Spot on Bill!!!
Comment by Irish Tuesday, May 17, 11 @ 11:07 am
- If union officials really want to help their members, why not stop the political spending and cut membership dues? -
Yeah, and then Scott Walker clones get elected and really help the unions.
Comment by Small Town Liberal Tuesday, May 17, 11 @ 11:10 am
billionaires-there are 18 in the state of illinois including oprah. 6 others are pritzkers, others on that list include the founder of beanie babies and cdw and the wrigly heir. a pritzker lead obama’s finance operation and crown just praised citizen richard daley.
http://www.breitbart.com/article.php?id=D8G8BKE83&show_article=1
in my case it’s more like lower upper middle class professionals in arlington heights who don’t want their taxes raised to pay for more spending on mvp beuracrats.
the unemployment rate the way it is if you feel you can get better compensation in the private sector, fine, I am sure we can get people that want the job, are happy with the salary, would bring fresh blood and wouldn’t have to worry about the shores of the world. I’d much rather have a mid career professional making a career change happy to have the job, happy to come work or some bright young whippersnapper with energy than some 20 year career beuracrat who feels he doesn’t get his fair share.
I’m not a rich kid though I wish I still had hair and was in the top tax bracket.
Comment by Shore Tuesday, May 17, 11 @ 11:12 am
Where do I sign up for these derided pensions? The ROI is better that what I see in the private sector.
Comment by Plutocrat03 Tuesday, May 17, 11 @ 11:12 am
@cassiopia,
State employees at the University of Illinois currently pay 8%, not 4%. My husband is one such employee and is non-union.
The 6% the state would pay is less then an employer pays for their share of Social Security.
The cause of the underfunded liablity in the systems is the failure of the state employer to pay their share.
When my husband agreed to the job in Illinois, he was required to agree to pay a certain portion of his income towards his retirement into the retirement system in return for a lifetime annuity.
The Constitution says that is a contractual obligation. There is no reference to the word accrued (The Alaska Constition does say accrued).
Contract law says a court cannot add to or take away from the plain meaning of a contract. Contract law also says if a contract is ambiguous it goes against the interpretation goes against the entity writing the contract.
Most state employees, my husband included cannot get Social Security even if they pay into on another job. (He has and does).
The department my husband is in has not gotten a raise in years, health insurance goes up each year, along with increased parking costs and other costs, just like everyone else.
If you seriously think 10% of a normal employees income is not to much, then you make to much.
Comment by win Tuesday, May 17, 11 @ 11:15 am
@Plutocrat03, the pension fund investors are actually very good at thier jobs. That has served to offset the underfunding of the employer portion in the past. The situation has gotten so dire that even the investors are unable to offset it currently. This is not caused by poor investments, nor a lack of employee contributions.
Comment by win Tuesday, May 17, 11 @ 11:18 am
“- Small Town Liberal - Tuesday, May 17, 11 @ 11:10 am:
- If union officials really want to help their members, why not stop the political spending and cut membership dues? -
Yeah, and then Scott Walker clones get elected and really help the unions.”
STL-
If members choose to contribute to campaigns, they obviously could. The difference is that they will choose to do it instead of having the union do it for them.
Comment by Anonymous Tuesday, May 17, 11 @ 11:19 am
@Shore, You’d be surprised to find that quite a few leave jobs with the state of Illinois, nor are these often older employees. While Illinois may be able to get new workers, they often look at the University of Illinois at least, as a better resume to get a better job either in another state with government or the private sector.
Comment by win Tuesday, May 17, 11 @ 11:24 am
I’d be all for a limit on union political contributions as soon as the same limits are put on the Koch Bros., Bill Gates, Eli Broad, and all the other individual culprits and well as coporate contributions. As far as Daley and Obama and the Pritzkers and Crowns, well, I think those influences are quite evident. The unions can’t compete with that kind of money.
Comment by Bill Tuesday, May 17, 11 @ 11:26 am
Cornerfield, there is no guarantee, in fact this bill even takes away the supposed guarantee in the Constitution now doesn’t it.
Oh, and as I recall, they get to change to employee portion every three years. The state would of course only pay their less then Social Security contribution of 6% or perhaps even less (not sure, have you ever read a bill? unreadable)
Comment by win Tuesday, May 17, 11 @ 11:27 am
–billionaires-there are 18 in the state of illinois including oprah. 6 others are pritzkers–
Do the Pritzkers have any openings, are they taking applications? Because I think I could be really good at being a Pritzker.
Comment by wordslinger Tuesday, May 17, 11 @ 11:32 am
You can’t read the bill because there is no bill yet. Typical. Watch Wed and Thurs how the rules are subverted and this unconstitutional sham is rammed through, probably without much intelligent debate, not that much of that ever takes place down here anyway. They could save a lot of money to pay back the pension debt if we just let Madigan declare law whenever and however he felt like it. Who needs a legislature? Just send them their money and let them stay home.
Comment by Bill Tuesday, May 17, 11 @ 11:32 am
I’m with you there wordslinger.
Comment by Shore Tuesday, May 17, 11 @ 11:38 am
Yeah Shore, I’m with you. I don’t want to see my taxes increased to pay for spending on “mvp beuracrats” (sic). What about the other 99.99% of state employees?
Comment by PublicServant Tuesday, May 17, 11 @ 12:00 pm
Lets not forget that state employees must also pay into social security for their pension/retirement. This brings the equation up to 20.2% of their income. And hey, lets raise insurance costs and throw in a few furlough days while we’re at it.
Comment by Anon Tuesday, May 17, 11 @ 12:36 pm
If the state continues to not pay the amount it committed itself to paying in all these years, then in a few years we’re ack in exactly the same place.
Comment by titan Tuesday, May 17, 11 @ 12:40 pm
7000 to 10,000 Americans are turning 65 every day. Most will at least be slowing down due to age related factors, and their incomes will drop. They then will become sensitized to the fact that their taxes are going up to pay for public employee (fed, state, local) retirement benefits that will exceed their own on average. The early retirement ages and COLAs will drive them nuts when they figure it out. That government retirees could retire early because they received taxpayer subsidized healthcare (pre-65) may drive some to irrational conduct. Most private sector workers don’t get it, but they will. And when they do, it would be best if the union crowd has already taken action to ensure that no additional costs are passed along to this group. Otherwise, they may face politicians this group will seek to vote in that will make today’s recommendations at reform look mild.
Comment by Cook County Commoner Tuesday, May 17, 11 @ 12:54 pm
Is the legislature really so cynical as to think that a judicial ruling on this will be based on whether it directly affects judges or not? “Oh look, this doesn’t affect my pension so whatever”. Knowing a few judges I’m guessing the blatently cynical attitude that judges make rulings based on their own self interest is really going to tick judges off!
Comment by girlawyer Tuesday, May 17, 11 @ 1:10 pm
The state employees are also taxpayers. Since the state failed to fund the pensions, it wants the employees to make up the short fall. If a tax credit was created for the additional pension payments, it would be fare and constitutional. The politicians are taking the withholding from Motorola and giving it back for economic development. Motorola gives its employees pensions. Why can’t they take the withholding from state employees and shore up the pension system under the same economic development law?
Comment by Tax credit Tuesday, May 17, 11 @ 1:11 pm
my spell check does not have bureaucrat in it. sorry. And for earlier, to the unions targeting the “billionaires” all 18 of them in Illinois, please be my guest and go after the beanie babies guy, wrigley, oprah and the pritzkers on that list. I am sure that will win you lots of friends and fans.
Comment by Shore Tuesday, May 17, 11 @ 1:18 pm
===Lets not forget that state employees must also pay into social security for their pension/retirement.===
Exactly. In short, they will be forced to contribute 20% of their income to two mismanaged retirement schemes. At some point, you will be better off opting out and making a go of it in the stock market - at least then you would be sure that your contributions are being made.
Comment by Slick Willy Tuesday, May 17, 11 @ 1:19 pm
While I am not opposed to paying more than my current 9% and think it is actually needed, two of the more scary propositions seem to be that there is no requirement that the State/employer pay in its share.
More problematic is the 1-time irrevocable election an employee must make by next year as to whether they will stay in Tier 1, or go to Tier 2 or the 401-K style. While the decision is irrevocable the employee contribution amount will be adjusted every 3 years on a going forward basis.
Say a contribution goes from 9% to 16% now. There is nothing to prevent it from going from 16% in 3 years to 20%. Essentially the current employees are guaranteeing payouts for the retirees with no additional contribution from the State/employer.
Comment by Helm Tuesday, May 17, 11 @ 1:20 pm
– Is the legislature really so cynical as to think that a judicial ruling on this will be based on whether it directly affects judges or not? –
Yes.
Comment by PublicServant Tuesday, May 17, 11 @ 1:26 pm
“Otherwise, they may face politicians this group will seek to vote in that will make today’s recommendations at reform look mild.”
One of the legislative proposals that sparked outrage in Wisconsin was to have teachers contribute 5.8 percent of pension payments made on their behalf instead of having the state continue to pick up the entire cost. They were NOT being asked to contribute 5.8 percent of their actual salaries, mind you.
Whereas here in IL, the proposal is to make teachers kick in 4 percent more of their actual salaries and other state employees anywhere from 6 to 10 percent more. So the proposal being floated around here actually makes Gov. Walker’s proposal look mild by comparison (strictly on the pension issue, that is, leaving aside the collective bargaining and other provisions which were the real subject of the protests).
Comment by Secret Square Tuesday, May 17, 11 @ 1:32 pm
Commoner - Taxes are not going up because of state employee pensions. They are going up because our past legislator’s and other public officials took your money and mine and spent it on whatever they deemed important (or self-indulgent) at the time, to hell with the future. Now they want to make me pay a second time for what I already paid for, when they took my original payment to build a new museum in your district so you would vote for them again. This is an easy out for them, they have no real consequence except for p****** off some cranky old state workers, and you are falling all over yourself to buy their rhetoric.
Comment by Joe Public Tuesday, May 17, 11 @ 1:37 pm
I find it pompous that legislators get a per diem of $111 per day when they stay in Springfield, while a State worker gets a measly $28 per diem, when they are forced to stay out. Bring the legislators down to the same level as the workers and there will be a cost savings.
Comment by A Voter Tuesday, May 17, 11 @ 1:46 pm
Clarification: in WI, prior to the Walker administration, the teachers’ share of their pension was 6.2 percent of salary but school districts apparently were picking up that portion under collective bargaining agreements in the majority of cases.
Comment by Secret Square Tuesday, May 17, 11 @ 1:49 pm
- Slick Willy - Tuesday, May 17, 11 @ 1:19 pm:
===Lets not forget that state employees must also pay into social security for their pension/retirement.===
“At some point, you will be better off opting out and making a go of it in the stock market - at least then you would be sure that your contributions are being made.”
One of the major advantages of the Social Security/401k system is that the money is yours, and yours alone, and the GA and Governor will be unable to tap it for their various whims.
Comment by Anonymous Tuesday, May 17, 11 @ 2:05 pm
===they could have made that part of the contract===
That’s well beyond the scope of a legal state worker union contract.
Comment by Rich Miller Tuesday, May 17, 11 @ 2:38 pm
===will these cost sharing percentages be able to change during future collective bargaining processes? ===
No. Beyond the scope of negotiations.
Comment by Rich Miller Tuesday, May 17, 11 @ 2:38 pm
===I’m guessing the blatently cynical attitude that judges make rulings based on their own self interest is really going to tick judges off! ===
LOL
I’m guessing that letting them feel that way is a whole lot safer than jacking up their pension contris and finding out for sure.
Comment by Rich Miller Tuesday, May 17, 11 @ 2:42 pm
We’re talking about SB0512 here, right Rich? What additional information would I be getting, if I were a subscriber regarding this?
Comment by PublicServant Tuesday, May 17, 11 @ 2:59 pm
“Lets not forget that state employees must also pay into social security for their pension/retirement.”
Not all of them do. And, so what? So do I.
“Chris,
Instead of being envious and begrudging hard working, underpaid state employees their retirement security, why not begin to fight to get your own?”
NOT envious. NOT begrudging. I fight *daily* to get my own by maximizing my current earnings.
I philosophically object to public employee unionization; I know public employees who do, too, albeit employees in non-union jobs (and I do not mean elected officials–who should *NOT* participate in publicly funded pension plans, as a rule). And that even with having been raised by a public employee union member.
If you don’t like the deal that your bosses (that is, ALL the citizens of Illinois, not just the reps and guv who owe fealty to your unions) are offering you, you are free to quit and find a better deal somewhere else.
Comment by Chris Tuesday, May 17, 11 @ 3:16 pm
===What additional information would I be getting, if I were a subscriber regarding this?===
There’s only one way to find out.
Comment by Rich Miller Tuesday, May 17, 11 @ 3:19 pm
===One of the major advantages of the Social Security/401k system is that the money is yours, and yours alone, and the GA and Governor will be unable to tap it for their various whims.===
Well, you got that half right. Social Security is starting to look like a bigger version of the state pension debacle.
Comment by Slick Willy Tuesday, May 17, 11 @ 3:26 pm
–”Boo Hoo. I pay over 20% and have *no* guarantee of any sort.”–
Chris, are you actually saying you are required aka mandated to pay 20% of your salary toward your retirement?
Comment by Cindy Lou Tuesday, May 17, 11 @ 3:29 pm
“We’re talking about SB 512 here, right Rich?”
For a bill that’s causing this much concern it has surprisingly little content (because it’s still a shell bill without even any amendments posted yet).
Comment by Secret Square Tuesday, May 17, 11 @ 3:36 pm
Hey, Rich. I assume Stewart Brand isn’t a subscriber…
Comment by Cincinnatus Tuesday, May 17, 11 @ 3:43 pm
Hb 149 is the legislation, i dont want to pay more,who does? But if it gets me out of here with my current benefits i’m all for it.
Comment by foster brooks Tuesday, May 17, 11 @ 3:53 pm
–Exactly. In short, they will be forced to contribute 20% of their income to two mismanaged retirement schemes. At some point, you will be better off opting out and making a go of it in the stock market - at least then you would be sure that your contributions are being made.–
LOL, you first.
Just like Rich dusted off the old “state pension funds going broke” hit record from the 1950s the other day, “the Social Security sky is falling dirge” has been going on for at least 30 years.
Not to disturb the ideological purity of those who were born yesterday, but Social Security is certainly the most successful government program of all time, and a major reason for the greatness of this country.
And it’s still in the black and will be for some time. Adjustments will and can be made, based on the fact that we live in a society where you can now live and be productive for a long, long time (gee, how did that happen?)
If you’re worried about anything, look at Medicare, because, folks, those last few years of life, every life, for everyone, can cost millions for everybody. I don’t what the solution to that is except removing some zeroes from the right hand side and calling it a day.
But if you think Social Security is a mismanaged scam, compare and contrast your and your parents way of life with that of your grandparents and great-granparents.
Not to mention, when the rest of the Planet Earth was choosing up sides between the Commies and the Fascists and going at it, Social Security sure made republicanism, democracy and capitalism seem like a reasonable alternative.
And that was worth every buck.
Comment by wordslinger Tuesday, May 17, 11 @ 4:03 pm
==And it’s still in the black and will be for some time. ==
Only because they don’t accrue liabilities on any basis, much less on an actuarially correct basis. If we accounted for state pensions on the same basis, they would be in the black, too, because more money has been paid into the funds than has been paid out, even taking into account the pension bonds Blago issued.
Comment by Pat Robertson Tuesday, May 17, 11 @ 4:26 pm
“Chris, are you actually saying you are required aka mandated to pay 20% of your salary toward your retirement?”
Oh, I’d be all for allowing public employees to opt out of the pension plan. ALL. FOR. IT.
Wanna bet how many actually would, even if it does go to 14%? I’ll take the under.
Comment by Chris Tuesday, May 17, 11 @ 4:42 pm
@Shore -
You named billionaire individuals but forgot billionaire companies.
I’ll agree though that merely asking billionaires to pay their fair share doesn’t provide enough revenue.
Cook County alone has 169,000 millionaire households, #2 in the country.
If we ask millionaires to pay their fair share, we can go after Chicago at the same time.
“Going after Chicago millionaires” is a great sound bite for Quinn heading into 2014 because even though we all know there are millionaires in Franklin County, how many of them are going to step forward and admit it?
Comment by Yellow Dog Democrat Tuesday, May 17, 11 @ 4:57 pm
Chris,
I laugh out loud when you and others proclaim how much worse off you have it in the private sector. Walk a mile in my shoes and you’ll see what a sweet life you live. Yes, I appreciate having a job. What I don’t appreciate is the constant berating of the “public” towards my profession and the assumption that I’m living high on the hog. False. I have friends in the private sector and they are treated a hell of a lot better than I am. They get bonuses and raises. Wanna know what I get. Furlough days and stagnant wages (I’m not in the union). Your quick retort will be quit. Well that’s all fine and good except I have obligations just like everyone else. If it goes to 14% I’ll be leaving the system. I cannot afford that. It is a ludicrous number. So I wouldn’t make that bet cause I know a lot of others that can’t afford it as well. So you and the others keep up your public employee bashing to you can feel better about yourself. Pretend that you are the only taxpayers and that public employees also don’t pay taxes. Pretend you are my boss. Whatever makes you feel good at night.
Comment by Demoralized Tuesday, May 17, 11 @ 5:00 pm
Dem: “If it goes to 14% I’ll be leaving the system.”
**ALL Serious Questions!!** Does that mean that public employees *currently* can opt out of the pension system? That participation is no more required than my participation in a 401k? If you opt out, does one then have to “opt in” to social security, if not otherwise covered? **ALL Serious Questions!!**
Dem: “I laugh out loud when you and others proclaim how much worse off you have it in the private sector.”
I did not say that. I did say that retirement saving in the private sector ain’t cheap, and comes with no guarantee. And that whining (which many are doing) about possibly having the contribution upped to 14% is not persuasive.
Dem: “I have friends in the private sector and they are treated a hell of a lot better than I am. They get bonuses and raises.”
I know people in the private sector, too. You know what many of them get? Stagnant wages (3 years with no raise for me!) and constant worry about layoff notices. It isn’t all milk and honey here, either.
Dem: “I’m not in the union”
How do you feel about public employee unions, then? Think they’re an unmitigated good?
Dem: “the assumption that I’m living high on the hog”
No assumption here, but I’m tired of the “we’re entitled to the previously negotiated pension rules, forever” BS. Which isn’t what you’re saying, but is getting oft-repeated in your collective name as a “public employee”.
Comment by Chris Tuesday, May 17, 11 @ 5:15 pm
“Cook County alone has 169,000 millionaire households, #2 in the country.”
Cook County is also the 2d largest county in the country. Percentage-wise, Cook is not much different from national average, so isn’t anywhere close to the top.
Comment by Chris Tuesday, May 17, 11 @ 5:23 pm
- Demoralized - Tuesday, May 17, 11 @ 5:00 pm:
“I laugh out loud when you and others proclaim how much worse off you have it in the private sector. Walk a mile in my shoes and you’ll see what a sweet life you live.”
This class-warfare between state workers and private workers needs to stop. You need to realize that state workers are primarily paid by the private workers, and private workers need to realize that public workers are not at fault for budget shortfalls.
The fixed benefit pension was commonplace in the country 50 years ago, for both private and public workers, but there are now generations of workers who have never participated in a pension program and only know the Social Security/401k scheme. There is also a number of public workers who have only been in a pension program and know nothing of the risk private workers feel about their retirement.
It is unfair that public workers are guaranteed a fixed benefit. It is also unfair to public workers that this game is being played by the GA and Governor with their pension fund.
It is unfair that the defined benefit needs to be backed by the taxpayer whose obligation is undefined. If pension fund returns are insufficient to cover the defined benefit, the taxpayer is on the hook for the difference. It is unfair that public workers are having games played with their contribution amounts.
We have a joint enemy, the legislature and the administration. They have failed us both with outrageous spending. They have taken our taxes, and underfunded your pension.
I want to add one more group that has failed us. Your union serves only itself. Public employees should be allowed to join the union, or not. Automatic deduction of union dues should be eliminated, and unions should sink or swim on their own without the coercion of workers, most of whom must join the union as a condition of employment. it is unfair that one segment of public workers have one set of employment conditions while another group has a different conditions.
The schism is not between the workers and the taxpayers. It is between both of us, and the elites in Springfield and the union headquarters who like nothing more to see us at odds and drive a wedge between us which allows them to continue their games for the power, money and influence it brings them while we take pot shots at one another.
Comment by Cincinnatus Tuesday, May 17, 11 @ 5:28 pm
I’m a tollway worker and we pay 8 percent in our pension and we always have. So what right does the state have taking our money we put in our whole career.
Comment by moe Tuesday, May 17, 11 @ 5:42 pm
@Chris -
I’ll take my soundbites, you take yours.
If you put all the millionaires in Cook County together, they’d be the second-largest city in Illinois.
If that doesn’t explain our tax system, I don’t know what does.
Comment by Yellow Dog Democrat Tuesday, May 17, 11 @ 5:51 pm
–The class war rages on with the peons fighting over the crumbs while the billionaires laugh all the way to the bank.–
Bill, Irish, 47, STL, YDD and others have been absolutely right on this subject for a long time.
If you can’t spot the chump the first time the deal goes around, you’re it. Did our parents make it so easy for us that many of us lost all self-pride and interest?
It’s been a bizarre ride since Lehman Bros. went down in 2008.
What’s really been strange is the that too many of the 99% who work for a living every day, or those who crazily wanted to buy a house at any interest rate, somehow blame themselves for the coked-out recklessness of the lunatics who ran the casinos on Wall Street, LaSalle Street and The City.
You ever spent time with the macchers on Wall Street, LaSalle Street or The City? Believe it or not, in 2011, their days aren’t filled with how they’re going to make life better for others.
The dominance of finance in the economy is out of whack compared to our history. Finance is supposed to draw investors together, the grease that makes the deals happen.
It’s not supposed to be an end in and of itself.
Comment by wordslinger Tuesday, May 17, 11 @ 5:57 pm
“I’m a tollway worker and we pay 8 percent in our pension and we always have. So what right does the state have taking our money we put in our whole career. ”
They haven’t taken a dime of your money; they’ve failed to put in the state’s portion of the required contribution to fund the benefits you have been promised.
Comment by Chris Tuesday, May 17, 11 @ 5:57 pm
–”Cook County alone has 169,000 millionaire households, #2 in the country.”
Cook County is also the 2d largest county in the country. Percentage-wise, Cook is not much different from national average, so isn’t anywhere close to the top.–
LOL, you’re like Cincy.
You don’t see a connection between those two facts?
Comment by wordslinger Tuesday, May 17, 11 @ 5:59 pm
“If you put all the millionaires in Cook County together, they’d be the second-largest city in Illinois.”
Don’t know where you got the stat that there are more than 197,899 (pop of Aurora) millionaires in Cook–numbers I find are less than that in 2007, and the total is much more likely down than up since then.
Comment by Chris Tuesday, May 17, 11 @ 6:00 pm
“You don’t see a connection between those two facts? ”
There are at least 4 facts in there (# of millionaires, #2 in the country, 2d largest county and Cook having about the same percentage of millionaires as the USA overall), so I’m not sure which 2 you are asking about. I certainly see the connection between Cook being the 2d largest county and having the second largest # of millionaires (both #2 behind LA County, which interestingly has a significantly lower than national average percentage of millionaires).
Comment by Chris Tuesday, May 17, 11 @ 6:04 pm
@Chris -
Its 169,000 millionaire HOUSEHOLDS in Cook County.
If you look at PEOPLE, its 198,000 in Chicago alone.
So, to recap, Chicago: alot of freakin millionaires.
Moreover, I’m guessing that if you asked 25 random voters across the state how many millionaires live in Chicago, fewer than five would guess over 50,000, and none would guess more than 100,000.
The public policy result: a regressive income tax and over-reliance on regressive sales taxes, property taxes, and fees.
THAT is why Illinois has the fourth HIGHEST tax burden on low-income families and the 10th LOWEST tax burden on the Top 1%.
I like wordslinger’s quote, except in a Poker Game we call them The Pidgeon.
Comment by Yellow Dog Democrat Tuesday, May 17, 11 @ 6:48 pm
Chris the difference between you and your pension and a state worker and his or her’s pension is that you didnt see your pension raided and the funds used to keep down tax rates. And now since the deficit is so great and it isnt possible to keep up the raiding they want you to come up with the extra money to make up the difference.
In essence a state worker has been paying higher taxes for the last decade at least while the majority of Illinois Citizens has reaped the rewards.
Judging by your discussions on this board you probably would have went ballistic too.
Comment by Rick Tuesday, May 17, 11 @ 7:59 pm
Whatever your opinion, here’s some real numbers for you to see how this will affect real people.
Currently I have a little over 20 yrs with the state. I got paid about 2260 Gross ($4520 per month)on my most recent paystub:
Then deduct Aprx $150 ($300 per month) Fed Tax
$90 ($180 mo.) State Tax
$122 ($244 mo.) FICA
$90 ($180 mo.) Retirement (I’m on the 4% formula)
$95 ($190 mo.) Optional health
$17 ($34 mo.) Other Insurance
$29 ($58 mo.) Union Dues
$20 ($40 mo.) Def Comp.
Total deductions about $613 ($1226 mo.), Netting about $1647 per pay period ($3294 a month).
Under this proposal, at 14%, I would pay aprx.an additional $225 a check or $450 a month into retirement. Dropping me to netting $1422 per pay period ($2844 per month).
That reduction doesn’t include any increases that may/will come once they state gets the healthcare provider situation figured out. It also does not take into account any of the raises that were deferred or raises that are contracted for July 1, since the current budget proposals do not include money to fund them.
Yes, I know some would say, I should be thankful that I have a job in this time and economy, I am, very thankful. But I also can be upset that the state will not live up to there obligations as they currently exist, that they have continually underfunded the pension system, and now want to take more to make up for their mistakes.
Comment by Concerned Voter Tuesday, May 17, 11 @ 8:34 pm
It seems social security taxes have been diverted to pay for something other than social security
http://www.uexpress.com/scottburns/index.html?uc_full_date=20110220
Comment by mushroom in the dark Tuesday, May 17, 11 @ 9:37 pm
To those who commented about the State and / or the unions / employees not trying to get the State to contribute …
Multiple times over the past many decades there have been pension payment schedule bills enacted that were supposed to make up the missed payments and make the system whole. Every one of them, without exception, started out small and had a major ramp up designed to take effect after the then current Governor left office. Some of them even said the first thing to be paid out of GRF had to be the pension payment. That was (and technically still is) the “law” … which was regularly ignored by the legislature who passed bills “declaring” all was right with the pension world and cutting / delaying / deferring the needed payments.
In my opinion, this latest scheme, where they hit the employee’s this time, is nothing more than the latest game of “kick the can down the road” except this time the legislature is using class warfare and pension envy to attack the employees. (Same thing for trying to hit only the “early” retirees they wanted out with demands for health insurance payments … the law currently says 20 years service and it’s free.) I share Steve’s worry that the whole intent is to make the employee’s (a) 100% fund the current system and (b) make the employee’s make up the unfunded liability caused by the State not making the necessary contributions. Quite frankly, I wouldn’t trust a single number worked up by either any State government entity or by any of the Chicago groups calling for changes. In my pas job I’ve seen how the desired results were decided first and then the numbers “cooked” to get that answer.
I’ve said it before and I’ll say it again: The problem is not insurmountable; the legislature can pass a tax increase explicitly dedicated to solving the problem but they don’t have the political will to do so … it would mean admitting they didn’t do their job in the past and would draw such taxpayer ire everyone would be voted out next election. That’s why the legislature wants to blame the employees … anyone other than the legislature has to be found at fault for the problem … pure Illinois politics as usual. If the courts rules the changes are unconstitutional, then the legislature can say “don’t blame us, the tax increase is the court’s fault” … it’s all about who gets the blame.
Comment by Retired Non-Union Guy Tuesday, May 17, 11 @ 10:37 pm
“If you look at PEOPLE, its 198,000 in Chicago alone.”
Cite, please. Kids don’t count, unless they have separate trust funds, so you are saying there are *over* 100,000 HOUSEHOLDS in the city of Chicago with over $1,000,000 in non-primary residence, non-retirement savings, assets? And fewer that 69,000 in suburban Cook? Again, cite, please.
Comment by Chris Wednesday, May 18, 11 @ 12:02 am
“Chris the difference between you and your pension and a state worker and his or her’s pension is that you didnt see your pension raided and the funds used to keep down tax rates.”
There ain’t a dime in my “pension” to raid. I’ll gladly sign over all my rights in my current defined-benefit plan(s) to you for $1, if you prepare the docs. The collective bargaining units had the regulatory-capture-ish relationship with the legislature, saw they were being lied to, and went along with it anyway. I have minimal sympathy.
Comment by Chris Wednesday, May 18, 11 @ 12:06 am
Many teachers’ collective bargaining agreements contain provisions where the board (thus district thus taxpayers) pays all or a portion of the employee contribution to the Teachers Retirement System (TRS) pension fund.
The collective bargaining agreement is required by law to be on the district’s website.
If this law is passed, I wonder how many local unions will just ask the board (thus district thus taxpayer) to pay all or part of that increased contribution?
Remember, school board members elected are typically those endorsed by the union.
This legislation does not address many fundamental problems of TRS pension fund, which covers teachers and administrators (Supt, Asst Supt, Principal, Asst Principal, etc.) who are considered certified employees.
1. End of career salary spiking that has persisted for decades. Used to be up to 20% per year, now it’s up to 6% per year, each of the last 4 years, of the employees career. Causes underfunded pension. What other entity on planet earth provides their employees a 24% increase over 4 years in return for agreeing to retire. This underfunded pension shortfall is to be paid by the State of IL “fair share” contribution. Fair to who? The teacher/administrator or taxpayer?
2. 8.5% rate of return required by TRS pension fund. This rate is very high. Amongst the highest of any pension fund. It is not realistic in the long run. If the 8.5% rate of return is not achieved, the difference is charged to the State of IL “fair share” contribution. Fair to who? The teacher/Administrator or taxpayer? When you read the TRS and Buck Consultant literature you would think these people are smarter than Warren Buffet. I doubt it. ‘
3. End of career sick bank cash out. Causes salary spiking which causes underfunded pension. This underfunded pension is charged to State of IL “fair share” contribution. Fair to who? The teacher/administrator or taxpayer?
4. Just as most Federal Government and Private Industry has done, the state and local governments including Teachers/Administrators should change their pensions from defined benefit to defined contribution. It’s a double standard. Taxpayers who have to contribute extra to shore up an investment loss in their 401k, are further stuck by contributing extra taxes to shore up the investment loss of the TRS teachers/administrators pension fund.
The IMRF has several rules which are much more actuarial sound than TRS.
There are too many perks and loopholes in the TRS pension fund that are not found in Federal Government and private sector or even some state and local public sector. The IMRF should be used as a model to TRS. And all public pension funds should be changed to defined contribution. Then the focus would be where it should be, on the performance of the fund manager, not on the State of IL to make up some investment loss.
There is something else at play here. The budgeting process game. The Governor would propose x dollars for Education. Part of that discussion was how to allocate money between current salaries and pension contributions. Guess what the IEA lobbyists proposed? Current salaries. Because it provides immediate benefit to their members. And the state constitution requires the General Assembly to eventually come up with the pension contribution. Not to mention the larger salaries result in larger pensions. And the cycle continued year after year.
I don’t see this bill fixing the root causes of the problem. I see this bill allowing loopholes (collective bargaining allows the union to ask board to pay increased portion of pension contribution) which allows the IEA to once again creatively work the system to their advantage.
Comment by Mark Wednesday, May 18, 11 @ 12:52 am