Latest Post | Last 10 Posts | Archives
Previous Post: Fuel taxes and speed limits
Next Post: Question of the day
Posted in:
* 11:58 am - House Speaker Michael Madigan has filed a pension reform proposal. I’m still going through it, but I’m sure our pension experts out there can help figure out what’s in it. Click here to read the amendment (which was tacked onto Senate President Cullerton’s SB1) and make sure to comment below.
* 12:17 pm - I was given a quick briefing on the bill. Here are some of the highlights, but overall it’s somewhat pretty close to the Nekritz/Cross bill…
* The Tier 3 and cost shift language from Nekritz/Cross are out;
* COLA change is a “bit less onerous.” Instead of basing compounded COLA on only the first $25K of salary at retirement, this would provide a formula of $1k per year of service. So, if somebody worked 30 years, then the first $30K would qualify for compounded COLAs;
* The proposal’s Social Security wage cap is slightly lower than Nekritz/Cross. The cap is tied to the Tier 2 level. So, now the cap is $109k, which is a few grand lower and will grow more slowly;
* Retirement age, employee contribution levels are the same as Nekritz/Cross;
* State funding guarantee language is stronger than Nekritz/Cross - basically the same commitment as made to the bond houses.
posted by Rich Miller
Tuesday, Apr 30, 13 @ 11:59 am
Sorry, comments are closed at this time.
Previous Post: Fuel taxes and speed limits
Next Post: Question of the day
WordPress Mobile Edition available at alexking.org.
powered by WordPress.
The preamble reads like a horror movie script. I don’t think I’ve seen the fiscal problems spelled out as clearly as this. It’s breathtaking.
Comment by 47th Ward Tuesday, Apr 30, 13 @ 12:08 pm
The preamble looks like the first brief in the defense of the bill’s constitutionality.
Comment by Norseman Tuesday, Apr 30, 13 @ 12:14 pm
Nice how the Chicken Little preamble conveniently fails to mention anything about pension holidays. Don’t have to read far to see that it is completely unconstitutional. I’m betting the Supreme Court ain’t baiting on this.
Comment by Anonymous Tuesday, Apr 30, 13 @ 12:26 pm
I thought you guys were exaggerating, but WOW. I kept thinking the list of problems would stop as I got to the end of each page, but I’m 8 pages in and only now seeing it let up.
Comment by Colossus Tuesday, Apr 30, 13 @ 12:31 pm
they can add - inadequate funding by the Illinois House and Senate to the preamble
Comment by Marie Tuesday, Apr 30, 13 @ 12:32 pm
The preamble would sober up the town drunk. The most concise, informed assessment of the state’s fiscal condition and recent history that you’ll find anywhere.
Comment by wordslinger Tuesday, Apr 30, 13 @ 12:32 pm
Without reading all 277 pages, I just have a few questions. What pension groups does this include? If it includes the GA, do they get just 1/2 credit per year, since it is just a part-time job? And of course, would this still be a diminishment?
Comment by rusty618 Tuesday, Apr 30, 13 @ 12:40 pm
Pay more, work longer, get less… Diminshment? Well maybe, but that’s why we wrote the preamble. Oh yeah, we’re going to welch on the vendors and bond holders too… Just kidding. That would be wrong.
Comment by Jimbo Tuesday, Apr 30, 13 @ 12:43 pm
When this bill states the income limits on which a pension can be based on, it was hard for me to know whether if you are already above the cap by the time that the bill goes into effect that would be your salary base, or, does it mean that $109,000 applies to everyone even if you are already making above that cap now? How do you read the bill on this issue? Thanks Moonpath
Comment by moonpath Tuesday, Apr 30, 13 @ 12:45 pm
That preamble is like when you ask someone, “How are you doing?” and they actually TELL you everything, warts and all. Wow.
There are two posts I rarely respond to; Guns and Pension Reform, because I learn so much more reading, and following along, then participating on two subjects I know very, very little about on the legislative side.
I look forward to reading from the CapFax experts that post here the; 1) The very specific details of the amendment in the Constitutional light, 2)The Constitutionality, overall and 3) How this amendment works with SB1, Nekritz/Cross, and the politcal fallout of the Speaker finally laying out a plan.
This type of breaking story, with all the moving parts, is where Capitol Fax shines brighter than everyone else. The commenters here will break it down with the skill of a surgeon, and I can’t wait!
(Grabbing my popcorn and soda pop)
I’m ready!
Comment by Oswego Willy Tuesday, Apr 30, 13 @ 12:54 pm
A new “Pension Stabilization Fund” starting in 2020 will receive $1 Billion a year from the General Revenue Fund until 2045.
I think this is when certain pension bond repayments will end. Correct?
Comment by Dewey Dilligent Tuesday, Apr 30, 13 @ 1:03 pm
Maybe someone with more knowledge can chime in — but isn’t the collective bargaining stuff on page 10 — essentially — a not-so-subtle attempt to severely cripple — if not outright bust — AFSCME?
Comment by Frenchie Mendoza Tuesday, Apr 30, 13 @ 1:05 pm
On page 3, line 3, I’m guessing that million should be billion?
Comment by Phenomynous Tuesday, Apr 30, 13 @ 1:05 pm
The preamble is the state’s important public purpose argument that it will make when this heads to court. Many have said that strategy is a long shot at best, since the state created the crisis that it now argues gives it the police powers to unilaterally change a contract. In addition, serveral other alternative means to fund pensions have been offered that have been ignored, and most of those methods don’t run into the constitutional issues that this bill embodies.
But hey, the politicians were, are, and will continue to be spineless, so…
See you in court.
Comment by PublicServant Tuesday, Apr 30, 13 @ 1:06 pm
Funding goal is 100% by 2045 and then maintained at that level going forward.
Comment by Dewey Dilligent Tuesday, Apr 30, 13 @ 1:12 pm
Also, explain to me how the “funding guarantee” language in a law passed by this general assembly binds future general assemblies again.
Comment by PublicServant Tuesday, Apr 30, 13 @ 1:16 pm
If they pass it–and Madigan maybe could accomplish that–does that mean they can reduce the amount they pay into the pension fund for the fy that starts in July, while it goes through the courts. That would be an incentive to speed it through I guess even if there is a stay on implementation pursuant to an appeal.
The presentation may be more compelling, but I don’t think the constitutional issues have changed. Lipstick on a pig, etc.
Look at California. They were in horrific shape a couple of years ago, Brown came in, and now they are looking at possible increases for the schools. It can be done.
Comment by cassandra Tuesday, Apr 30, 13 @ 1:19 pm
Same lipstick, just another pig. Pay me the money you owe me. That’s my position.
Comment by Mouthy Tuesday, Apr 30, 13 @ 1:20 pm
Sec 2-126.5 says the General Assembly pension funds can no longer pay for any retiree healthcare.
Does GARS pay retiree healthcare?
Comment by Dewey Dilligent Tuesday, Apr 30, 13 @ 1:20 pm
Here’s an idea: How about 75% of all new tax revenues raised by fracking and expanded gambling be appropriated to the pension deficit, until the pension is 100% funded. I believe this would be 100% constitutional, and still provide monies to regulate fracking and gambling. A win-win, with no increased taxes and no diminishment of pension benefits.
Comment by Say it Ain't So!! Tuesday, Apr 30, 13 @ 1:20 pm
Seems to me that after you finish pages 1-7 you have to ask who let the problem grow this bad? Since MJM was speaker from ‘82 to ‘95 and ‘97 on. How did all these “ruinous borrowing schemes” occur? Maybe page 8 should read therefore i resign.
Comment by Mason born Tuesday, Apr 30, 13 @ 1:21 pm
@Mason Born - That, my friend, could be the comment of the day. Well said. Yet, in Illinois, we have this bizarre culture of loudly lamenting all of our problems and then consistently reelecting those who are responsible for them - not counting the ones who are removed from office via federal indictment.
Comment by JB13 Tuesday, Apr 30, 13 @ 1:30 pm
@JB13
I think if i messed up that bad i would hope they would let me resign instead of canning me.
Comment by Mason born Tuesday, Apr 30, 13 @ 1:32 pm
Seems to cover all 5 retirment systems to include teh judges.
Comment by facts are stubborn things Tuesday, Apr 30, 13 @ 1:38 pm
@Facts - Judges are not in the bill.
Comment by Cutler Fan Tuesday, Apr 30, 13 @ 1:45 pm
Do I read this right that under the proposal, the General Assembly will have their pension figured off of their salary as of their last day of service, while State employees will get their pension figured off of the average of the last 48 months of service. Why shouldn’t the General Assembly have their’s figured off the average of the last 48 months of service as well?
Comment by Say it Ain't So!! Tuesday, Apr 30, 13 @ 1:51 pm
Mason born
Pensions were grossly underfunded, deliberately, when Jim Thompson was Governor and Speaker of the House was George Ryan. This mess predates Madigan.
Comment by Anyone Remember? Tuesday, Apr 30, 13 @ 1:51 pm
You can bet your bottom dollar if this passes constitutional muster you’ve haven’t seen nothing yet.
Comment by foster brooks Tuesday, Apr 30, 13 @ 2:00 pm
Why isn’t anyone looking at the Martire Plan (CTBA)? Of everything I’ve seen, it appears to be the only one that actually solves the problem. In Illinois we spend way too much time arguing about inadequate solutions to the wrong problems. I’m old and tired of the resistance to using real data and facts when dealing with our problems.
Comment by nobody Tuesday, Apr 30, 13 @ 2:09 pm
Anyone Remember
I am not saying everyone else is blameless. Yet if you read the first 7 pages it becomes obvious that this has been a growing and foreseeable problem. Only one man has been in a position of power for almost all of the last 30 yrs. Add to that the one man in question seems to have an unlimited amount of influence on house proceedings. Kind of hard to say he shares no blame? Or for that matter that he is less to blame than a governor who left office over 21 yrs ago?
Make no mistake every one who held an executive or Legislative position in this state shares in the blame. So does AFSCME for not fighting the issue when the Pension Holidays were being taken many of which were sold as a means to avoid layoffs. However MJM has to deserve the lion’s share.
Comment by Mason born Tuesday, Apr 30, 13 @ 2:09 pm
the practical effect of Martire’s plan is it balloons the debt figure by billions making it politically unpalatable.
It’s like taking a 15 year mortgage and extending it to 30 years. Sure the monthly payments are easier to make, but the total figure you’re going to end up paying over those 30 years grows substantially.
Cue the “kicking can” line from Sen. Murphy.
Comment by Michelle Flaherty Tuesday, Apr 30, 13 @ 2:12 pm
Mike Madigan grandfathered himself in. How does this impact when he will retire?
Comment by Madigan Bad Tuesday, Apr 30, 13 @ 2:13 pm
Are they asking for increased employee contributions of 1% starting 7/1/2013 and 2% starting 7/1/2014, making a total of 3% additional contributions by employees?
Comment by Say it Ain't So!! Tuesday, Apr 30, 13 @ 2:28 pm
Confiscate property assets under the eminent domain laws and sell it to Asian countries.
Start with Midway airport, Daley plaza, Northerly Island, any natural resoucres like oil from fracking. Keep going until the bills are paid. Sell Lake Michigan water rights if we have to. We will be doing it anyways like the Chicago parking meter deal and the skyway.
Only difference is the money will go to the people it was promised to instead of some politically connected contractor or law firm that also promises to throw a campaign fund raising dinner in return.
This way you don’t cut anything!
These assets belong to the taxpayers. YOU didn’t build that.. the taxpayers did. You don’t have to raise taxes. You don’t have to cut benefits. Sell our assets. Let these foreign companies run sweat shops in the Daley center and sell it as a good thing becuase it creates much needed jobs. That’s all.
Comment by anon Tuesday, Apr 30, 13 @ 2:30 pm
I would think anything the GA does on their own will be unconstitutional. However, if they get the unions to compromise in between somewhere it will fly. But if the union leadership caves too much their members will not re-elect them. Messy situation.
Comment by WOW Tuesday, Apr 30, 13 @ 2:33 pm
Does SB1 change or eliminate the rule of 85 for employees 45 years old or older?
Comment by Where will it end Tuesday, Apr 30, 13 @ 2:34 pm
Fact check…..AFSCME opposed pension holidays in past sessions of the General Assembly.
Comment by Steelerfan Tuesday, Apr 30, 13 @ 2:34 pm
Its very simple the rest of the unions should follow Karen.
Also simple they could add state assets to the pension funds. For instance put the tollway system in it . There is 50 billion and it keeps it in safer hands that wont lease it and waster the money eg the parking meters….
Its the same stuff the house already passed and the Senate voted down
Comment by RNUG Fan Tuesday, Apr 30, 13 @ 2:34 pm
==COLA change is a “bit less onerous.” Instead of basing compounded COLA on only the first $25K of salary at retirement, this would provide a formula of $1k per year of service. So, if somebody worked 30 years, then the first $30K would qualify for compounded COLAs;
==
It is only less onerous for people who work longer than 25 years. For people who work less than 25 years, I’d call it pretty sad. Those of us who came here after the age of 40 are pretty well left out in the cold. And, that would mean the people that got hired on the basis of their skills and expertise.
Comment by mythoughtis Tuesday, Apr 30, 13 @ 2:38 pm
We owe the pension liability to ourselves, not to some third party lender. Martire does take longer to achieve the 80% funding but actually saves billions over the present unsustainable ramp. Take a look….
http://iasa.mediasite.com/mediasite/Play/6b801dac48e545a387381983adc141991d?catalog=1b1c3d3c-9b7c-49af-94e0-22579677f26c
Comment by nobody Tuesday, Apr 30, 13 @ 2:40 pm
Great news for all those teachers out there relying solely upon state pensions.
Comment by Keep Calm and Carry On Tuesday, Apr 30, 13 @ 2:46 pm
I found this paragraph on page 3 interesting:
In 2010, Public Act 96-889 established a package of pension benefits for new employees that has been determined to be among the least expensive public employee retirement schemes in the country. It can be argued that the new package of pension benefits has placed government employers at a competitive disadvantage, and our public universities, which are vital educational and economic institutions, have been exposed to a
significant risk.
Does this bill do anything to change pensions for tier 2 employees?
Comment by G'Kar Tuesday, Apr 30, 13 @ 2:48 pm
On COLA figures, mythoughts says “It is only less onerous for people who work longer than 25 years. For people who work less than 25 years, I’d call it pretty sad. Those of us who came here after the age of 40 are pretty well left out in the cold. And, that would mean the people that got hired on the basis of their skills and expertise.”
This is indeed correct and sad. I’ll have 20 years in, my wife just 19. I’ve done financial planning with the 3% cola in mind.
With luck the courts will say “no” to the changes!
Comment by retireSURS2014 Tuesday, Apr 30, 13 @ 2:53 pm
40 + 25 = 65.
Comment by Rail Sitter Tuesday, Apr 30, 13 @ 2:58 pm
Rail Sitter - Depending on age at time of enactment, it becomes Rule of 95 and the official retirement age shifts from 55/60 to 62/67 (I think, the numbers aren’t solid in my brain yet). I think RetireSURS2014 is right about a loophole.
Comment by Colossus Tuesday, Apr 30, 13 @ 3:03 pm
Has anyone among the IL GOP leadership offered a response yet?
The Illinois Policy Institute appears to be taking the position that any less than a defined contribution system would be irresponsible.
Perhaps one consequence of Speaker Madigan’s proposed amendment will be to drive the few remaining GOP members of the GA even further to the fringes.
Comment by Bill White Tuesday, Apr 30, 13 @ 3:07 pm
=== Also, explain to me how the “funding guarantee” language in a law passed by this general assembly binds future general assemblies again. ===
Public Servant, nobody who has an understanding of the process is going to explain this to you because they know there is no guarantee that can’t be undone by the General Assembly. We now have a constitutional guarantee that most of the pension reduction proponents say is irrelevant. Either because the “crisis” overrides the guarantee or that it only applies to benefits already received in hand.
Comment by Norseman Tuesday, Apr 30, 13 @ 3:13 pm
=== Also, explain to me how the “funding guarantee” language in a law passed by this general assembly binds future general assemblies again. ===
Public Servant, nobody who has an understanding of the process is going to explain this to you because they know there is no guarantee that can’t be undone by the General Assembly. We now have a constitutional guarantee that most of the pension reduction proponents say is irrelevant. Either because the “crisis” overrides the guarantee or that it only applies to benefits already received in hand.
Comment by Norseman Tuesday, Apr 30, 13 @ 3:13 pm
Now that I am at retirement age and have contributed to social security for 50 years and the state pension for 29 - I keep wondering why retirement is so elusive - never had a cola working for the state - not had a raise in well over 10 years - wonder just we can count on
Comment by Marie Tuesday, Apr 30, 13 @ 3:17 pm
Does the preamble include all the millions of dollars spent by “my money” back in the 90’s. Distributed out by each member. Wow… Maybe this could have been paid on the pension obligations.
Comment by My money Tuesday, Apr 30, 13 @ 3:19 pm
railsitter
yes, 40 + 25 = 65. 48 (which was my age when I started) + 25 = 73. I will not be doing my job at age 73. So, for me, I repeat, it is sad.
Read financial planning magazines. They will tell you that people retire earlier than planned due to health issues, more than any other reason.
Comment by mythoughtis Tuesday, Apr 30, 13 @ 3:21 pm
Here is another reason why this legislation is absurd. Essentially, Madigan is arguing that the State of illinois is on the verge of bankruptcy and can’t afford to pay its contractual pension obligations in full. Thus, retirees must take a haircut. There is no provision in the law for a state to declare bankruptcy; but even if there were, surely all classes of creditors would be required to take haircuts, not just one class. How can you legally force retirees to get less than they are owed, but not ask bondholders, suppliers, etc. to get less?
Comment by Andrew Szakmary Tuesday, Apr 30, 13 @ 3:33 pm
@Andrew Szakmary
=== There is no provision in the law for a state to declare bankruptcy; but even if there were, surely all classes of creditors would be required to take haircuts, not just one class. ===
Indeed.
And that is why I wonder how many of the GOP members of the Illinois House or Senate will commit to support Madigan’s amendment or whether they will reply “Not enough, yet!”
Comment by Bill White Tuesday, Apr 30, 13 @ 3:37 pm
==It can be argued that the new package of pension benefits has placed government employers at a competitive disadvantage, and our public universities, which are vital educational and economic institutions, have been exposed to a
significant risk.==
Nothing like the disadvantage they will face after this bill is enacted, telling the all potential employees that even if you contract for a competitive benefit package, we can revoke it at will, retroactively.
Comment by Anon. Tuesday, Apr 30, 13 @ 3:40 pm
Say it Ain’t So!! - @ 1:51 pm: Look at the author, that’s why.
Comment by Irish Tuesday, Apr 30, 13 @ 3:52 pm
Nothing like the disadvantage they will face after this bill is enacted, telling the all potential employees that even if you contract for a competitive benefit package, we can revoke it at will, retroactively.
And that is just what ALEC wants It will destroy public education and state Government =Game Set Match and done by a “democrat”
Comment by RNUG Fan Tuesday, Apr 30, 13 @ 3:55 pm
I was a little surprised reading the comments that no one commented on this section:
Sec. 7.5. Duty to bargain regarding pension amendments.
Notwithstanding any other provision of this Act, employers shall not be required to bargain over matters affected by the changes, the impact of changes, and the implementation of changes made to Article 14, 15, or 16 of the Illinois Pension
Code, or to Article 1 of that Code as it applies to those Articles, made by this amendatory Act of the 98th General Assembly or any subsequent Public Act, except with respect to
an employment contract or collective bargaining agreement that is in effect on the effective date of this amendatory Act of the 98th General Assembly and has not been amended, renewed, or
terminated after that date. In case of any conflict between this Section and any other
provisions of this Act or any other law, the provisions of this Act shall control.
Comment by Rod Tuesday, Apr 30, 13 @ 3:56 pm
Can people stop the bankruptcy chatter? The state isn’t going bankrupt and isn’t even close.
Comment by Liberty_First Tuesday, Apr 30, 13 @ 3:58 pm
It seems to be a hail Mary pass to con the Supreme Court into negating the pension clause based upon dire public emergency. The findings intro horror story and the waiver of sovereign immunity to enforce the pension funding provisions are there to justify the radical breach of the pension clause and its intent. But it does allow the GA to blame the SC if GA passes the bill and then it gets stricken.
Comment by D P Gumby Tuesday, Apr 30, 13 @ 4:23 pm
The court will translate the preamble to: “So you’re saying you mismanaged for 30 yrs., borrowed from the pension systems, made contractual employment agreements, and now you want to renege on the contracts and charge employees and retirees more to pay for your poor decision-making? Get outa my court.”
Comment by Soccertease Tuesday, Apr 30, 13 @ 4:28 pm
What will happen to those of us who have waited for retroactive colas from age 55 to 61? Will these be lost?
Comment by Crossface Tuesday, Apr 30, 13 @ 4:43 pm
Takes AFSCME and other unions ability to bargain…NONSTARTER!!
Try again MJM!!
Comment by gallerywalker Tuesday, Apr 30, 13 @ 4:44 pm
There is no question that the salary cap for pensions will totally destroy the ability of our state universities to recruit the best faculty. For top faculty, that salary cap easily translates into losing $100,000 per year in retirement. This massive disparity in benefits will put Illinois at a near impossible disadvantage in trying to recruit. I also suspect that if this goes through, there will be a mass exodus by faculty as well. why not go somewhere else where you can double your pension overnight?
Comment by Filmmaker Professor Tuesday, Apr 30, 13 @ 4:46 pm
After a quick read, here are a few more nuggets, mostly inside baseball if you will:
-Removes sick leave as creditable service for new hires, including CTPF.
-Makes the SURS “money purchase” benefit formula less lucrative.
-Kicks the non-public employees out of SURS (all) and TRS (some) but adds some new ones to IMRF. Go figure.
-Adds a “Captain Obvious” statement that the systems can’t use pension money for health care subsidies. (also Fed law)
Can’t see how the COLA change isn’t the D-word. The rest, like it or not, appears to have been crafted around this issue.
Comment by Arthur Andersen Tuesday, Apr 30, 13 @ 4:58 pm
I retired from my teaching career in 2010 with 37 years of TRS service credit. I planned my whole retirement on a calculated pension number with a 3% compounded AAI annually for the rest of my life. Would anything less than this benefit be considered a “diminishment” of my constitutional guarantee?
Comment by Meaningless Tuesday, Apr 30, 13 @ 5:45 pm
@Art Anderson
The bill does not add people to IMRF, read p 58 l 23 before you get to where you think it adds.
Comment by Donnie Veal Limone Tuesday, Apr 30, 13 @ 6:09 pm
Rule of 85 stays the same for employees who are at least 45 on July 1, 2013. At least they’ve taken consideration of the older employees who could not possibly change their financial position at this late stage of their careers.
Comment by No-raise Tuesday, Apr 30, 13 @ 6:43 pm
Donnie Veal, you’re right. I came back to correct my mistake and found you had caught it first. Thanks.
The Pension Code is a tricky beast.
Comment by Arthur Andersen Tuesday, Apr 30, 13 @ 6:53 pm
The Cross/Nekritz bill had a COLA freeze the first 5 years of retirement or 65 years old, which ever comes first. Is this COLA freeze in the Madigan bill? That is a real killer for retirees.
Comment by Dude Abides Tuesday, Apr 30, 13 @ 7:28 pm
So I understand this better…because pension payments are going to comprise 20 percent of GRF, thats not a bunch of money, thats just how they choose to spend it. If debt service comprised 20 percent of GRF would we all have a default party? 20 percent is not a lot out of my budget, its what i call my mortgage payment. Its a choice. No?
Comment by Anonymous Tuesday, Apr 30, 13 @ 7:36 pm
From the pension summary on Crain’s website–
New method of calculating the COLA.
Retired members will keep the compounded 3% annual increases they received up until the enactment, but future COLAs will be calculated differently. Going forward, the COLA will be based on 3% of a maximum annuity amount based on their years of service. The cap will be $1,000 for each year the employee had worked ($800 for those coordinated with Social Security). As an example, an individual retiring with 30 years of service will have a COLA of 3% of $30,000 or $900, which accumulates annually. If a person’s initial annuity is under this threshold, that person will continue receiving a 3% compounded adjustment based on their initial annuity until they reach the cap. This adjustment was originally proposed by Senator Radogno and incorporated in Senate Amendment #4 to SB 35. Additionally, current and future retirees would have the first or next year in which they can receive their COLA delayed. Retirees who are age 67 and older would be unaffected by this delay. Those under age 67 would have their COLA paused until either they reach age 67 or until the 5th
anniversary of their retirement, whichever comes first.
Comment by Nearly Normal Tuesday, Apr 30, 13 @ 7:45 pm
what does cullerton have to say about this?
Comment by foster brooks Tuesday, Apr 30, 13 @ 8:06 pm
I don’t know about Cullerton but the Senate did vote on this and it was a no
Comment by RNUG Fan Tuesday, Apr 30, 13 @ 8:15 pm
Update, 2:50 p.m. — Mr. Cullerton’s spokeswoman, Rikeesha Phelon, is out with a statement reacting to the Madigan bill, and it sure looks like the fight is on between the two top Democrats.
“The speaker and Cullerton have the same goal with different approaches,” the statement says. “Cullerton has worked to build consensus for a plan that is clearly constitutional. To that end he has sought to work with Republicans, members of his caucus and labor leaders. Those efforts will continue this week.”
Then comes the knife:
“The roll call on SB 35 may be instructive to those who are guessing at how unilateral pension changes will fare in the Senate,” adds the statement, referring to an earlier bill that is quite similar to Mr. Madigan’s new proposal. That bill “only received 23 yes votes,” well short of the 30 needed.
Ms. Phelon concludes on a more moderate note, saying, “There is an increasing urgency that the General Assembly finalize some action on this issue.” But the test of wills surely looks like it’s on. If Mr. Madigan’s bill passes the House, will Mr. Cullerton refuse to call it for a vote in the Senate, like Mr. Madigan now is doing with Mr. Cullerton’s S.B. 1 by amending it to his liking?
Read more: http://www.chicagobusiness.com/article/20130430/BLOGS02/130439973/madigan-makes-pension-move-submits-own-plan#ixzz2S01fYt92
Comment by Nearly Normal Tuesday, Apr 30, 13 @ 8:18 pm
Oh Yeh this is like a personal insult to Cullerton so …..so house members ….go ahead make my day
Comment by RNUG Fan Tuesday, Apr 30, 13 @ 8:23 pm
Thanks for the info nearly normal. For those state workers who have paid in to social security, the Madigan is hardly any more generous with the COLA than the Nekritz plan. If you retire with 30 years of service and have social security, 30×800=24,000. 3% of that would be $720 more per year. Under the Nekritz plan you would receive a raise of $600 per year.
Comment by Dude Abides Tuesday, Apr 30, 13 @ 8:42 pm
It appears Nekritz/Cross was the serious trial horse, and this is the final House proposal after refinements for passability. Their reactions will be key.
Comment by walkinfool Tuesday, Apr 30, 13 @ 8:49 pm
Surely Madigan, Nekriiz, Cross and other legislators know that their “Pension Reform” legislation is just more politics and is in violation of the Illinois Constitution. They must realize that a certain percentage of our pension contributions went to our COLA. This means that the COLA should be based on one’s entire pension and not just as Madigan proposes $1 K per yr of service
Someone mention earlier that there are things that the legislators could do to put the state on a more fiscal sound footing. I agree; practical solutions and not politics are the only answer. For example,they could
re-amortize the pensions debt service. They could change the tax structure to one that is more progressive. They could review loopholes for corporations and scrutinize corporations for benefits being received. Also, they could analyze state programs for actual need and effectiveness. By doing this, the State will find itself with a more fiscally sound budget and in the process will meet its constitutional requirement of not diminishing state retiree pensions and benefits
Comment by Earl Shumaker Tuesday, Apr 30, 13 @ 9:37 pm
Earl I just don’t think it registers. I think the only thing that would is a primary. Primary because we have mostly one party districts. If they are really well funded some will lose. And then if they get a it again and again ….then most of em will get it
Comment by RNUG Fan Tuesday, Apr 30, 13 @ 9:52 pm
When are u people on this forum going understand that the union can’t negotiate benefits away for retirees…. Period!
Comment by I know labor Tuesday, Apr 30, 13 @ 10:41 pm
Madigan’s bill will be ruled on it’s constitutionality…. Negotiating with a union will not strengthen his bill. This is about retired individuals… Not collective bargaining.
Comment by I know labor Tuesday, Apr 30, 13 @ 10:46 pm
I worked enough outside of education that I qualified for Social Security. But my amount was slashed almost 60% because I was in the teachers’ pension plan. And now my pension plan is going to penalize me because I have social security. What a crock.
Comment by Dinosaur Tuesday, Apr 30, 13 @ 11:04 pm
Late to the game; just got home. May not get it read until tomorrow.
Comment by RNUG Tuesday, Apr 30, 13 @ 11:28 pm
This is strictly an insider detail but the revised COLA is based on the same number of credible service years as the pension is based on … so that means the people who bought up to 5 years of service under the 2002 ERI will have the purchased years included in the total years used to calculate the revised COLA.
Comment by RNUG Wednesday, May 1, 13 @ 12:14 am
Depending on your age at retirement, the 5 year holiday may still be in there. For Tier 1 you have to be age 67 or already be retired 5 years … so a Tier 1 leaving at age 62 or younger would have a 5 year COLA “holiday”.
Comment by RNUG Wednesday, May 1, 13 @ 12:43 am
Two other thoughts:
1) I agree with the other posters that, based on previous IL SC rulings, this bill is likely diminishment.
2) I think the swipe at sick time doesn’t make a lot of sense. The State keeps going back and forth on this issue, at times they have paid for 1/2 of sick time, counted the whole time for pension credit, etc. all in an attempt to cut down on the amount of sick time actually used. I can just see people being sick quite a bit the last year as they burn up their time.
Comment by RNUG Wednesday, May 1, 13 @ 1:07 am
I’m going to stop now because I’m trying to not repeat points that other people have already made.
Comment by RNUG Wednesday, May 1, 13 @ 1:08 am
Actually, one last thought.
I believe the reason there is language explicitly excluding the use of pension funds for retiree health insurance is someone in the GA is trying to reinforce some of the “not in the pension clause” logic Nardulli used in the Maag case.
Comment by RNUG Wednesday, May 1, 13 @ 1:12 am
isnt the sick time provision for new hires only?
Comment by Anonymous Wednesday, May 1, 13 @ 5:41 am
The Supreme Court reviewed People ex rel. I.F.T vs.
Lindberg, 60 Ill.2d 266 (1975) and McNamee vs. State of
Illinois, 173 Ill.2d 433 (1996). The court examined the
defendants’ claims that the pension protection clause creates
an enforceable contractual right only to receive benefits, not
to control funding. The court concluded that the plaintiffs’
allegations of inadequate funding on the part of the State
were insufficient to constitute an impairment of benefits in
violation of article XIII, section 5 of the Illinois
Constitution. The plaintiffs could not prove that the funds
at issue were “on the verge of default or imminent
bankruptcy” or that the benefits were in immediate danger
of being diminished (182 Ill.2d at 233). While the Court
recognized that article XIII, section 5 of the Illinois
Constitution created an enforceable contractual right to
benefits, such a right could not be divined to enforce the
level of state contributions mandated by Public Act 86-273.
The court found that the framers of the Illinois Constitution
were careful to craft in the pension protection clause an
amendment that would create a contractual right to benefits,
while not freezing the politically sensitive area of pension
financing. Because the court ruled that the Illinois
Constitution does not create an enforceable contractual right
to funding, it did not reach the question of whether a court
order compelling state officials to appropriate the full
statutorily-required pension contribution was barred by the
separation of powers doctrine.
Comment by Anonymous Wednesday, May 1, 13 @ 5:51 am
The Supreme Court reviewed People ex rel. I.F.T vs.
Lindberg, 60 Ill.2d 266 (1975) and McNamee vs. State of
Illinois, 173 Ill.2d 433 (1996). The court examined the
defendants’ claims that the pension protection clause creates
an enforceable contractual right only to receive benefits, not
to control funding. The court concluded that the plaintiffs’
allegations of inadequate funding on the part of the State
were insufficient to constitute an impairment of benefits in
violation of article XIII, section 5 of the Illinois
Constitution. The plaintiffs could not prove that the funds
at issue were “on the verge of default or imminent
bankruptcy” or that the benefits were in immediate danger
of being diminished (182 Ill.2d at 233). While the Court
recognized that article XIII, section 5 of the Illinois
Constitution created an enforceable contractual right to
benefits, such a right could not be divined to enforce the
level of state contributions mandated by Public Act 86-273.
The court found that the framers of the Illinois Constitution
were careful to craft in the pension protection clause an
amendment that would create a contractual right to benefits,
while not freezing the politically sensitive area of pension
financing. Because the court ruled that the Illinois
Constitution does not create an enforceable contractual right
to funding, it did not reach the question of whether a court
order compelling state officials to appropriate the full
statutorily-required pension contribution was barred by the
separation of powers doctrine.
Comment by another viewpoint Wednesday, May 1, 13 @ 5:52 am
What Madigan wants Madigan gets so here is my prediction- Madigan’s Bill will sail through the legislature and be signed into law by our hapless Governor and then the Supreme Court 18 months later will find the law constitutional emphasizing the fiscal crisis which confronts the State- For all of you out there harping on the Pension Clause remember this- the Constitution says what the Supreme Court says it says and the political class finally realizes that the State has reached the end of the road in terms of kicking the can- in terms of details it is refreshing that Madigan has woken up to the fact that the Union and Association affiliated people never should have been in the TRS since they are not public employees even though the legislation was engineered to allow them to fit into the definition of “Teacher” for pension purposes- Madigan will long be remembered for saving the State from fiscal calamity even though he and the other elected leaders over the last 30 plus years caused this mess in the first place
Comment by Sue Wednesday, May 1, 13 @ 6:58 am
PS to my last post- It looks like someone on Madigan’s staff finally took the time to review the US Supreme Court decision in Blaisdell( 290 US 398) where the Court ruled that State constitution impairment clauses must occasionally recognize financial emergencies when considering impairment of private contracts- Madigan’s Bill will be challenged in Court but at the end of the day the preamble will suffice in convincing the Supreme Court that the interests of 23 million Illinois residents is greater then the interests of public pension participants
Comment by Sue Wednesday, May 1, 13 @ 7:27 am
Sorry- I meant 12.3 million Illinois residents
Comment by Sue Wednesday, May 1, 13 @ 7:34 am
– Supreme Court that the interests of 23 million Illinois residents is greater then the interests of public pension participants–
If Illinois had 23 million residents, that kind of tax base would take care of the pension contributions in a jiffy.
Comment by wordslinger Wednesday, May 1, 13 @ 7:39 am
Sue,
Depends on whether the SC buys the fiscal emergency argument. When the only thing being cut is the pensions, it’s a lot tougher to make that argument with a straight face.
Comment by RNUG Wednesday, May 1, 13 @ 7:53 am
RNUG, CMS just sent out materials on the Healthcare coverage. Did you get yours yet?
Comment by PublicServant Wednesday, May 1, 13 @ 8:14 am
Anonymous @ 5:41 am:
Could be. I went through it fast early this morning (after driving the entire previous day, so I was tired) and might have misread who the sick time provision affected. I still see it as an opportunity for people to burn the time before retiring.
Comment by RNUG Wednesday, May 1, 13 @ 8:18 am
RNUG- where have you been the last several years- State Government has been slashing every program out there only to see all available new revenue dollar being deposited into the pension Systems- The State has been cutting everywhere it can
Comment by Sue Wednesday, May 1, 13 @ 8:20 am
Is it a coincidence that the General Assembly is holding off on the new gambling legislation and approving fracking, when the revenues could be used to lower pension obligations? Once the pension bill goes through and State employees have to pay for it, they will pass the gambling and fracking bills, so the revenues can go to “pet projects”.
Comment by Say it Ain't So!! Wednesday, May 1, 13 @ 8:22 am
Public Servant @ 8:14 am:,
No. I just got home late last night from traveling; been in Texas for a family wedding. My mail has been stopped for over a week and doesn’t restart until tomorrow …
Comment by RNUG Wednesday, May 1, 13 @ 8:23 am
Sue,
I’ve been right here the last 40+ years watching the politicians play games with the pension systems …
Comment by RNUG Wednesday, May 1, 13 @ 10:40 am
Sue, you sound bitter. Perhaps you should stop asking why you, and start asking why not me. Everyone used to get pensions. Everyone. Look it up.
Comment by Jimbo Wednesday, May 1, 13 @ 6:43 pm
Wow that was strange. I just wrote an very long comment but after I clicked submit
my comment didn’t appear. Grrrr… well I’m not writing all that
over again. Regardless, just wanted to say superb blog!
Comment by Woodrow Thursday, May 9, 13 @ 4:50 pm
I was suggested this blog by my cousin. I am not sure whether this post is written by him as no one else know such detailed about my trouble.
You are incredible! Thanks!
Comment by http://www.youtube.com/watch?v=U6Fx-UUcUQA Friday, May 10, 13 @ 11:22 am
Your style is very unique in comparison to other people I have read
stuff from. Thanks for posting when you’ve got the opportunity, Guess I will just book mark this web site.
Comment by Lindsey Friday, May 10, 13 @ 11:44 am
What about ERO for TRS teachers so that they can retire at 55? If it does not get passed then what happens to the 200 million dollars already collected as 0.4 % of my paycheck along with all other TRS members paid into this program?
Comment by Gary from Chicagoland Thursday, May 16, 13 @ 8:56 pm