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Madigan confirms that retirement age won’t be raised

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Illinois

* We talked about this yesterday, but now the Speaker himself has confirmed it…

Illinois House Speaker Michael Madigan says it would be unconstitutional to force current state employees to work to age 67 before collecting full retirement benefits.

Madigan told The Associated Press Thursday that he will not raise the retirement age as part of package to cut pension costs. The Chicago Democrat says delaying retirement for current state workers would violate the Illinois Constitution.

Discuss.

posted by Rich Miller
Friday, May 25, 12 @ 9:42 am

Comments

===The Chicago Democrat says delaying retirement for current state workers would violate the Illinois Constitution.===

Among other pension proposals being bandied about.

Comment by PublicServant Friday, May 25, 12 @ 9:46 am
So raising the age is an impairment, but everything else they want to do isn’t? I don’t understand.

Comment by Jimbo Friday, May 25, 12 @ 9:50 am
They don’t have to raise the reirement age since they’ve already made it financially unfeasable with the health care premiums. Many peopel will have to work till then in order to not have to spend a good portion of their pension benefits on insurance premiums if nay of that passes constitutional muster.

Comment by No Name Nick Friday, May 25, 12 @ 9:56 am
They aren’t raising the age because they don’t want to create a run for the door of current state employees.

They know that when they get sued & lose that these people that they ran off are now retired & they can’t get them back. They’ll be forced to replace them with lower salaried employees who are funding the pensions of higher paid people…….the problem then is worse than it is now.

Comment by TCB Friday, May 25, 12 @ 10:06 am
Just imagine what things would be like right now if Madigan/Blago had spend the flush times catching up on the pension debt (kind of like a rainy day fund- remember that discussion?) instead of flushing cash out to everyone. Big government folks all engage in magical thinking - thinking the good times will never end….sound familiar?

Comment by Liberty_First Friday, May 25, 12 @ 10:15 am
===had spend the flush times catching up on the pension debt ===

They weren’t all that flush. Revenue collection nose-dived after 9-11 and never really came back. But I do agree that way too many new programs were implemented under RRB. No question.

Comment by Rich Miller Friday, May 25, 12 @ 10:17 am
While I have some ideas for solutions, I am more concerned that once again our General Assembly is not discussing these alternatives openly. When will the citizens demand transparency in governance? Given that our GA has had a lack luster fiscal track record don’t they at least owe us that much? They do work for US …right?

Comment by DoubleD Friday, May 25, 12 @ 10:37 am
Retirement age and insurance: whatever. Where is the provision that says they guarantee to make their payments? The failure to do so is largely what caused the problem to begin with. If they don’t address that, it doesn’t matter what else they do, we will be looking at this again in 15 to 20 years.

Comment by lincolnlover Friday, May 25, 12 @ 10:38 am
The 67 retirement age was a red herring. They knew it was unconstitutional. It allows them to show they are compromising.

Comment by Choice? Friday, May 25, 12 @ 10:42 am
Lincolnlover- the Illinois Supreme Court has ruled that they cannot force a funding method on the state but the court can get involved when the first pension benefit goes unpaid. They have also ruled that employees are vested from day one of employment under the rules and that the rules employees go by are what is in place on the day they retire.

Comment by Liberty_First Friday, May 25, 12 @ 10:54 am
Capt Fax ought to post the Illinois Channel video it will help folks better understand what is happening

Comment by CircularFiringSquad Friday, May 25, 12 @ 11:14 am
I’m wondering about reports that the COLA will be reduced-or attempts made to do so–for current employees when they retire, as well as for exisiting retirees. Wouldn’t that also be unconstitutional. Of course, I suppose they could just pass it, it, claim the savings, and let the courts decide. It would be a couple of years minimum of litigation, allowing them to claim the savings over a couple more annual budgets.

Comment by cassandra Friday, May 25, 12 @ 11:14 am
So, do the rest of the unconstitutional proposals get dropped by the wayside … or do they try to “compromise” by enacting something that is only a little unconstitutional?

Comment by titan Friday, May 25, 12 @ 11:15 am
Liberty - I think you missed my point. I understand the court rulings, etc. My point is that current proposals put all the burden and sacrifice on employees, with no guarantee of funding from the state. Without that guaranteed funding, it doesn’t matter what the GA does, we will still be facing the same issue (as we did in the 1970s)20 years down the road.

Comment by lincolnlover Friday, May 25, 12 @ 11:18 am
@lincolnlover - don’t worry about the lack of a need for the GA to make its payments in to the funds. Two things could happen:

1. the current proposals (shifting greater burdens to the employees without fixing the GA underfunding problem) are distilled into a Bill and passed, then struck down by the courts - giving a couple years of utter turmoil and then decades of really servere finacial problems.

2. the current proposals (shifting greater burdens to the employees without fixing the GA underfunding problem) are distilled into a Bill and passed, then upheld by the courts - in which case the GA will just shift more and more of the burden to the employees in the same manner, until such time as the the need for any GA funding is gone (which will negatively impact the quality of worker drawn to public service and or require better compensation to them as they end up in some new alternative 401k style set up instead and the state won’t get the old lower pay/better benefit trade off like it used to)

Comment by titan Friday, May 25, 12 @ 11:35 am
Luckily, ensuring that sick children, feeble seniors and the financially distessed receive sub-standard health care, or none at all, is perfectly constitutional. Illinois is slithering from the surreal to the barbaric. Why don’t the government employee union bosses just occupy the GA and throw out their elected martinets and quislings.

Comment by Cook County Commoner Friday, May 25, 12 @ 12:06 pm
Ooooooooooooh OK, so MJM is the final authority on what’s constitutional? Gotcha. Just double checking.

Comment by Smitty Friday, May 25, 12 @ 12:12 pm
@Cook County Commoner - the sick children, feeble seniors and financially distressed are in the same generalized boat as the employees. The GA has made committments for which it did not provide a responsible financial foundation. The house of cards is now starting to fall down.

Comment by titan Friday, May 25, 12 @ 12:13 pm
As long as CCC doesn’t have to pay a penny more in taxes to alliviate the situation, he’s content to play off employees fighting to keep their earnings against the state’s emtitlement commitments. Hypocritical maybe?

Comment by PublicServant Friday, May 25, 12 @ 12:39 pm
Titan - Zactly.

Comment by lincolnlover Friday, May 25, 12 @ 1:22 pm
Madigan says the COLAs are the primary driver of the pension cost crisis and they want to change it. I think this is not doable as well-From a purely contractual basis. From the SURS website:

Employee Contributions
Since SURS is a contributory system, you must
contribute a percentage of your earnings to receive
benefi ts. Your contributions are equal to
8% of your gross earnings, including earnings
for overtime and summer sessions. Also, 8% will
be deducted from any vacation payments you
may receive from your employer—if you are paid
for unused vacation days when you terminate
employment. SURS members may not make
voluntary contributions, except to purchase
qualifi ed optional service credit.
EMPLOYEE CONTRIBUTION CHART
Percentage of Benefi t to Which
Gross Earnings It is Applied
6 1/2% Normal Retirement Benefi t
1/2 of 1% Automatic Annual Increases
In Retirement Benefi ts
1% Survivors’ Insurance
8% Total Employee Contribution.

so part of our 8% contribution is to pay for the COLA. I have paid that 8% for 31 years (more than 240,000 in contributions) and have paid for the COLA. How can they now say that they will not pay it to me?

Comment by SIUPROF Friday, May 25, 12 @ 1:25 pm
The COLA proposal has a huge flaw in that it will push many lower-income retirees toward or below the poverty line. The longer they live, the poorer they will become relative to the cost of living.. Please keep in mind that many clerical and service persons in SURS and TRS receive relatively modest wages.

Teachers in TRS and University employees in SURS who do not have Social Security will suffer this fate. Those retirees who also have Social Security will be somewhat protected by the rather good COLA provisions of the SS system. In general TRS and SURS employees are not eligible for Social Security.

Also, AFAIK most SURS-covered employees hired before 1986 are not covered by Medicare.

Comment by east central Friday, May 25, 12 @ 1:29 pm
Funny how that works. Yesterday raising the retirement age — a key component of pension reform — was “a tougher pill to swallow.” Today, after the Medicaid cuts were passed, Madigan suddenly discovers it’s unconstitutional.

The Medicaid cuts were sold as part of a big package of shared sacrifice. Could be they meant shared sacrifice by the poor more than politicians or the public-sector unions. But that’s a familiar story with Illinois Democrats.

Comment by Anonymous Friday, May 25, 12 @ 3:04 pm
So then Anonymous 3:04…regarding that shared sacrifice; what’s your shared sacrifice? I’m paying the tax increase too.

Comment by PublicServant Friday, May 25, 12 @ 4:04 pm
Why was he 3% increase in employee contribution withdrawn? That was the only legitimately legal and constitutional change proposed.

Comment by AC Friday, May 25, 12 @ 4:40 pm
AC - paying more to get the same return has been deemed to be a dimunition of benefits elswhere, it may have been seen as unconsititutional here too

Comment by titan Friday, May 25, 12 @ 4:47 pm
For state employees the full pick up is 8%. Raising it to 7% would be as constitutional as the move from 0 to 4.

Comment by AC Friday, May 25, 12 @ 5:05 pm
You’ll find out soon AC, when Illinois courts rule in favor of state employees and annuitants.

Comment by PublicServant Friday, May 25, 12 @ 6:15 pm
PublicServant: I hope and pray you are correct!

Comment by AC Friday, May 25, 12 @ 6:22 pm
He finally did something right for a change.

Comment by ah HA Saturday, May 26, 12 @ 6:56 am