Latest Post | Last 10 Posts | Archives
Previous Post: Medicaid stuff
Next Post: Question of the day
Posted in:
* Audio and video links are here. The presser will be followed by a react from House GOP Leader Tom Cross and Senate GOP Leader Chris Radogno.
* Blackberry users click here…
posted by Rich Miller
Friday, Apr 20, 12 @ 12:02 pm
Sorry, comments are closed at this time.
Previous Post: Medicaid stuff
Next Post: Question of the day
WordPress Mobile Edition available at alexking.org.
powered by WordPress.
we’re “celebrating” 8.8 percent unemployment now?
Comment by Shore Friday, Apr 20, 12 @ 12:15 pm
Okay, so this is a plan to institute a mass retirement of current employees.
Comment by Mouthy Friday, Apr 20, 12 @ 12:35 pm
I think it ain’t soup yet, but his proposal seems like a reasonable start. Of course it is painful. There aren’t any non-painful choices left.
Comment by steve schnorf Friday, Apr 20, 12 @ 12:36 pm
Good thing I’m on the portable plan so I can raid my pension now.
I stayed in this job because of the earlier retirement. If that’s not an option I’m cashing it out.
Comment by Stuff happens Friday, Apr 20, 12 @ 12:48 pm
Radogno sounds very reasonable
Comment by steve schnorf Friday, Apr 20, 12 @ 12:53 pm
Radogno wants to revisit school funding equity? So she’s reconsidering her roll in helping kill Edgar’s tax swap in committee all those years ago?
Comment by Michelle Flaherty Friday, Apr 20, 12 @ 1:04 pm
How about they roll their pension plan into the state employee’s plan and see how they like it. Why are we giving a pension to part time employees to (state legislators)
Comment by Had it Friday, Apr 20, 12 @ 1:08 pm
There was concern that the benefit of Tier 2 employees did not match their contribution and the IRS could trigger Social Security costs and payroll taxes. Does this now mean we face the same issue with Tier 1 employees? This actually looks a lot like Tier 2 with a 3% increase in employee contributions.
If we start paying payroll taxes, the cure might be worse than the disease.
Comment by Ahoy Friday, Apr 20, 12 @ 1:09 pm
That’s not your cell phone vibrating Rich. That’s the sound of state employees heading for the door.
Regarding Quinn’s musings, threatening people isn’t giving them a choice. In order to change a contract, there has to be positive consideration given before the terms of a contract can be changed. I’m not seeing anything positive in the way of consideration here. So, pass all the bills you’d like that are either unconstitutional, violate federal contract law, or both, and we’ll see you in court.
Comment by PublicServant Friday, Apr 20, 12 @ 1:11 pm
So the highlights are now that a current state employee would pay and additional 3% contribution for a total of 7%, do away with the rule of 85 and retire at the age of 67, and have to wait 5 years for COLA’s. Or you can retire now and enjoy current benefits. Any clear thinking employee is going to bail before this goes into effect and the ones left will fight like hell, in court, to overrule the law.
This should be called: “We screwed you and now we’re going to screw you some more.”
Totally unconscionable.
Comment by Mouthy Friday, Apr 20, 12 @ 1:15 pm
Obviously Governor Quinn doesn’t go to the grocery store or the gas pumps. Try to support a family of 4 on $36,000 (as a state employee) and give up 3%.
Comment by Lil' Enchilada Friday, Apr 20, 12 @ 1:15 pm
Initial reactions:
1) I can hear the retirement paperwork being filled out by anyone who can do so.
2) Under the new proposal, the future retiree health insurance is only guaranteed a state contribution, not the current deal of free for +20 yrs. Opportunity for a bait and switch, where the State only contributes a lesser amount.
3) Still don’t see a 100% change proof method of funding the pensions. Short of issuing bonds for the next 30 years of contributions today and paying back the bondholders over the same period years, I don’t see a guarantee to make the annual contributions. Quinn even admitted whatever got passed could be changed in the future … so there is no guarantee other than the word of a man who has been known to change his mind every day.
I do have to give Quinn credit for at least proposing bold changes. Not sure the “choice” being offered will survive the expected lawsuit.
Comment by Retired Non-Union Guy Friday, Apr 20, 12 @ 1:18 pm
The only positive consideration I’d ever consider as a state employee — and I’m actually surprised no one’s ever mentioned this — is to trim my hours from 37.5 to 30 (or whatever) — and then offer me the new package.
In other words, a state employee gives $$$ long term for reduced work week with no change in salary. Seems like a no-brainer to me. I work fewer hours, get paid the same, but get a smaller pension. I know a lot of folks who would take more time in the short term in exchange for a slight reduction in pension benefits.
Comment by anonymouse Friday, Apr 20, 12 @ 1:24 pm
Can’t argue with the premise that his proposal is a reasonable starting point. But, as always, the devil will be in the proverbial details.
I frankly don’t see how they can hit their savings targets for the plan as described. Either they are banking on a mass “early retirement” of State employees or there is something they aren’t telling us yet, like more cost sharing of health care expenses for current retirees. Recall that the cost of moving from the current pension funding program to the new program is estimated to be over $1 billion for TRS alone in FY13-theatotal cost could approach $2 billion for all funds.
FWIW, Tier II fix isn’t mentioned in his proposal, but that may be small taters stuff that doesn’t merit inclsion in the press release.
Comment by Arthur Andersen Friday, Apr 20, 12 @ 1:36 pm
AA,
Although we don’t know, I think health insurance cost sharing by current retirees is being discussed for the next union contract. At least the union rep I heard speak sure implied it. That’s why Quinn’s insurance “contribution” comment jumped out at me …
Comment by Retired Non-Union Guy Friday, Apr 20, 12 @ 2:18 pm
This announcement means the the state is going to court to try and skip out on its obligations. There is no way that the public service employees would ever agree to this proposal. Significantly reduced benefits for another empty promise of funding? This is the state saying “sue me” if you expect to get anything.
Comment by Morty Friday, Apr 20, 12 @ 2:33 pm
“the state is going to court to try to skip out on its obligations”
Well, how do you suggest that the state MEET its obligations if NONE of the current retirement provisions can change? Another massive tax hike? Close more prisons and mental health centers? Dump half the state workforce? Close down all the state parks? Abolish Medicaid completely? What alternatives are left, particularly if the Wall Street bond houses are threatening us with junk bond status?
Comment by Secret Square Friday, Apr 20, 12 @ 2:37 pm
Rich, Wow Rich, your cynicism of the yesterday is sure confirmed by the Preckwinkle comments…..
Comment by Liberty_first Friday, Apr 20, 12 @ 2:38 pm
Well the effective date better be at least two years from now so it can work its way though the courts. Because as soon as they enact it, they will start spending the money on their pet projects and it will push system even more in debt when the courts overturn it.
Comment by Frogger Friday, Apr 20, 12 @ 2:44 pm
===There is no way that the public service employees would ever agree to this proposal.===
It is not currently legal in Illinois for public employee unions to negotiate pension benefits.
Comment by Rich Miller Friday, Apr 20, 12 @ 3:02 pm
The public-sector unions are distorting the numbers again.
They say, “The average public employee pension is just $32,000. Because most public employees do not receive Social Security, this modest pension is their life savings.”
Actually, according to the Daily Herald, the average teacher pension exceeds $48,000. Teachers are by far the largest group of pensioners. The average SERS pension is about $28,000 but almost all collect Social Security, pushing the total well into the 40s. Add in health care that is far superior to Medicare. Compare that to the average Social Security benefit of about $14,000, and the MAXIMUM SS benefit of about $22,000, and it’s easy to conclude that the state retirement package is extremely generous compared to the private sector.
http://www.dailyherald.com/article/20111106/news/711069888/
Comment by Anon Friday, Apr 20, 12 @ 3:14 pm
Sounds like Quinn grabbed pieces of various proposals and built a straw man. I look forward to the various actuaries of the retirement systems evaluation. Hope the process allows for this to happen - it needs to be a sound solution, not just a politically expedient one.
Comment by Archimedes Friday, Apr 20, 12 @ 3:21 pm
With all due respect to Mr. Carrigan’s statement, what pension solutions have the unions offered?
If they’re not going to offer solutions, I don’t blame them since they are elected within their own organization, but don’t say you’re committed to working toward a solution if you’re not, that’s worse than the Senate Republican’s holding budget press conferences and not filing budget amendments.
Comment by Ahoy Friday, Apr 20, 12 @ 3:36 pm
===it’s easy to conclude that the state retirement package is extremely generous compared to the private sector.===
Social Security is not now nor has it ever been considered a pension fund.
Comment by Rich Miller Friday, Apr 20, 12 @ 3:55 pm
There’s no economic reason to treat all pension funds the same when they have vastly different funding ratios, different employee contribution levels, different employer contribution levels, different retiree health care costs, and cover different employees (I.e. expecting the trades to work until they are 67 is unrealistic given the toll their bodies take).
Given all the time and effort put into these proposals, they’re extremely lazy and illogical.
Comment by chi Friday, Apr 20, 12 @ 4:00 pm