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* People who aren’t public employees really shouldn’t be participating in the public pension system. But they are…
Township Officials of Illinois is a private trade group, not a governmental agency, but its employees are eligible for public-sector pensions subsidized by taxpayers, the Better Government Association has learned.
No one from TOI is currently drawing a pension from the Illinois Municipal Retirement Fund. But TOI’s four full-time employees, two of whom are registered lobbyists, stand to draw the potentially lucrative retirement benefit down the road, according to interviews and records.
* And it’s not just the TOI…
The Illinois General Assembly recently passed a bill aimed at curbing public pension abuses by some labor union leaders. But the reforms, signed into law on Jan. 5 by Gov. Pat Quinn, don’t address private groups such as TOI that lawmakers over the years have let into the system.
Similar groups include the Illinois Municipal League and Illinois Association of Park Districts. Like TOI, they work for and lobby on behalf of their governmental agency members – yet they aren’t public bodies and don’t directly serve taxpayers.
TOI was founded more than a century ago. But it wasn’t until 1971 that the General Assembly, for reasons not totally clear, amended the state pension code so TOI could participate in the pension plan. However, TOI didn’t join IMRF — the second-largest public-sector pension plan in Illinois, with $25 billion in assets — until 2001.
Discuss.
* Meanwhile…
House Speaker Michael Madigan has created an Illinois House special committee that will review the investment strategies of the state’s pension funds.
Mr. Madigan, a Democrat, appointed Republican House Minority Leader Tom Cross to chair the committee, according to a letter today to House Clerk Timothy Mapes.
The speaker said in the letter that he was creating the Special House Committee on Pension Investments to “examine the investment strategy of the State pension systems.”
“The pension systems in Illinois not only affect the beneficiaries, but every citizen in Illinois,” Mr. Cross said in a statement. “We plan to invite the systems, their investment managers, outside investment experts and others to examine the state’s systems’ current investment strategies and make sure they are in the best interest of all parties. “
posted by Rich Miller
Thursday, Jan 19, 12 @ 6:23 am
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The private employee slip-ins to public pension systems seems to be one of the best-kept secrets in Springfield.
Comment by wordslinger Thursday, Jan 19, 12 @ 8:47 am
This is a perfect example of the BGA just looking for headlines. These local government trade groups recruit from local governments for their workforce, and it isn’t rare for the association’s employees to return to a local government job. Being able to keep their pension is an important recruiting tool. They make their contributions to the system, and the trade group (WHOSE INCOME IS MEMBERSHIP DUES PAID BY LOCAL GOVERNMENT MEMBERS) make the required contribution too. This isn’t some abuse.
Comment by Its Just Me Thursday, Jan 19, 12 @ 8:54 am
Sounds like Its Just Me might have some “skin in the game” on the pension issue.
It does not matter whether or where from the trade groups’ pension contributions are made. The simple fact is that government pensions are intended for government employees, which the employees of trade groups are not. That’s the same as saying a consultant from Accenture is entitled to a government pension, simply because s/he did contract work for a city/agency which was willing to make the contributions.
Furthermore, the contributions made by the trade groups/government bodies are irrelevant to the argument, because those contributions are not and would never be enough to support the pensions that would ultimately be drawn from the pension funds. Pension funds are like insurance plans or social security, they are funded by pooling resources from large groups of contributors (i.e. government employees) to fund the pension draws of retirees.
This means that even if a trade group makes contributions to the fund, their pensions are still being subsidized by real government employees and taxpayers with and for whom they have NEVER WORKED!
Comment by QBRNST Thursday, Jan 19, 12 @ 10:07 am
Its Just Me also may not realize that in the Illinois code, pensions that employees of private trade groups get are not based on creditable service— a pension provision that would allow public employees who take a break from their government jobs to apply their time spent away to their overall pension upon retirement.
Lobbyists and employees for TOI, the IML, and the other included trade groups get public pensions regardless of whether they were ever public employees.
Comment by Emily Miller Thursday, Jan 19, 12 @ 10:15 am
This seems like a good time to remind folks that Illinois’ retirement systems were 89% fully-funded as of 1999.
Three recessions in a decade — the tech bubble collapse, 9/11, and Wall Street crisis — were beyond the control of lawmakers, governors, or union employees.
That said, we failed to Prevent this problem when we nixed the Edgar Tax Plan back in 1997, which would have put us on a stronger economic foundation, erased the structural budget deficit, and put us in a stronger position when the triple crisis hit.
Comment by Yellow Dog Democrat Thursday, Jan 19, 12 @ 10:37 am
Hesitate to comment, because of my relationship with TOI, but here goes. Never thought of TOI (or IML) as a “trade group”, which is just some catch-all term used to categorize various organizations: I guess Elected Officials just become a “trade”. Funny, I always considered myself to be a heavy-equipment operator (trade) employed as a road maintenance person (job description), whose title is Highway Commissioner, who, (in Illinois) must be an Elected Official (category?).
I believe that most of us in township government are of the opinion that TOI is an extension of township government itself, acting as a clearinghouse for information and education. (as would IML).
While “lobbying” has become a part of its job, this is an extension of TOI’s duty to keep its members informed of what the state legislators are doing, and how their actions affect us as units of local government. TOI staffers have to be registered as “lobbyists” to get full access.
In the aspect of its duties to keep us informed, TOI is just a big glorified secretary or staff-researcher, an employee of Townships- and township employees are eligible to be members of IMRF.
Also please note that membership in IMRF would have had to have been voted on and accepted by either TOI’s Board of Directors, or the full membership of TOI. All of these voters HAVE to be elected officials. Joining IMRF could not have just been done on a whim by TOI staffers.
Comment by downstate commissioner Thursday, Jan 19, 12 @ 12:14 pm
I find it just a bit odd that The Speaker is putting together a committee to look at how well the pensions invest their money. The governor is putting together a group to look at ways pensions can be reduced constitutionally. But no elected official is even talking about a task force to look through the pension roles and eliminate all of the people receiving pensions that shouldn’t be, like the union officials, the lobbyists, these private organizations listed by the BGA. Are they afraid of finding friends? The GA members and the Civic Comittee and the IPI, and the Governor try to lay all of this on the rank and file state workers, but it is their buddies and their loopholes that are defrauding the system and they are not taking any action on that.
Comment by Irish Thursday, Jan 19, 12 @ 12:52 pm
What ever happened to the rule that you actually had to work 8 years in a government system like SERS before you were vested and entitled to a pension? If you want to stop that kind of abuse in the various government pension systems, eliminate the give-away loopholes and go back to that rule.
While you are at it, make the 8 year rule apply to the GARS … if they can’t get re-elected enough to put eight years in, then no pension for the legislature.
Comment by Retired Non-Union Guy Thursday, Jan 19, 12 @ 3:48 pm
Yeah, I want the members of the General Assembly having input on the investment strategy of the pension systems. NOT!!! They’ve already mismanaged my pension by not investing enough initial capital into the system.
Comment by Demoralized Thursday, Jan 19, 12 @ 4:38 pm
Well, this issue actually doesn’t impact me. But I do make the connection between someone who works for a local government, and someone who works for an association that works for local governments. As long as they still have to make the same pension contributions, work long enough to get vested, etc etc. I wish the BGA would focus on real issues, instead of this headline grabber designed to make it appear these employees are somehow getting a lush pension without actually working.
Focus on goverent employees who have multiple government jobs, government employees who use their government job to help their friends/family, nepotism, the corrupt process the State and Chicago does redistricting; there really is a long list.
Comment by Its Just Me Thursday, Jan 19, 12 @ 4:49 pm
This is the perfect example of the BGA making something out of nothing. IMRF is one of the rare public pension systems that is actually considered well funded (I believe most recently they were funded around 86%).
In contrast, a real issue would be the grossly underfunded pension systems (averaging between 29-53% funded) and dealing with the crisis that undoubtedly awaits. By issuing these types of reports, the BGA seems to be enabling a common criticism of the legislature - diversion from real, urgent, controversial issues that will have devastating impacts. Yes, Illinois has pension problems, but let’s get real. It seems pretty obvious that the real pension issue is underfunding, now is probably not the time to be criticizing a well funded system. If it ain’t broke…
Comment by Common sense Thursday, Jan 19, 12 @ 10:47 pm
It just keeps getting worse, and worse and…
Comment by wishbone Thursday, Jan 19, 12 @ 11:34 pm