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* Tribune…
A union lobbyist who qualified for a teacher pension windfall by subbing at a school for one day is now suing a state retirement board because his benefits were scaled back once his sweet deal was exposed.
Retired Illinois Federation of Teachers lobbyist David Piccioli, 65, is arguing that lawmakers violated the state constitutional provision that says a pension cannot be “diminished or impaired” once it is set.
Piccioli is already collecting $31,485 from the Teachers Retirement System. If he wins his case, his teacher pension could increase by more than $36,000, the Tribune estimated — more than doubling what he gets now.
Piccioli also gets a second state pension worth just over $30,000 that covers time he served as a legislative aide. Both pensions are based on an average of his six-figure salaries as a union lobbyist. […]
If Piccioli’s lawsuit succeeds, the outcome may suggest to lawmakers that they cannot reduce pension benefits under any circumstances.
The lawsuit is here.
* From Piccioli’s press release…
Since the 1980s, the IFT has been one of 800 authorized employers for TRS, enabling its staff to earn teacher pension credits for their work on behalf of public education. Employees are required to pay all TRS contributions, both individual employee and employer shares so there is no taxpayer cost to the system.
In 2007, Mr. Piccioli obeyed all laws to enroll in TRS on his first day as a classroom instructor. His enrollment was identical to 300,000 other members who joined the teacher retirement system after their first day of teaching. He earned TRS service credits going forward for IFT employment from 2007 until retirement Dec. 31, 2012. He paid all contributions with personal funds from an IFT retirement annuity.
Separate from his lawful enrollment in TRS, the General Assembly adopted PA 94-1111 in 2007. The law offered an opportunity for scores of people to upgrade their service credit in public pension systems. Piccioli joined them in upgrading his service with nine years of credits for IFT employment from December, 1997 through May, 2007. He paid all TRS contributions with personal funds out of pocket.
In total, Piccioli contributed $365,000 out-of-pocket to TRS to cover the full “normal costs” of his pension. As required by law, he paid all contributions for both the individual employee and employer. Those contributions, including interest compounded at 8.5%, equaled 20% of his salary.
Because he paid both sides of pension contributions–both employee and employer shares—plus compounded interest, a legislative fiscal analysis for PA 94-1111 said taxpayer costs for his pension are “expected to be minor.”
Pension language in PA 94-1111 (SB 36) was not controversial at the time. It passed the Illinois House 109-6-0 and the state Senate 55-0-1.
Pension upgrades with past service credit are a common practice in the Illinois pension code. Statutes have enabled thousands of individuals to purchase pension credit in all public systems for work in military service, private school teaching, education-related associations and other employment.
* Here’s my problem, though. The IFT endorsed Rod Blagojevich in 2006 after obtaining from him a solemn oath that he would not rule out an income tax hike. He flip-flopped on them within a day or so. Instead of dumping him for lying, the union continued backing Blagojevich, giving him hundreds of thousands of dollars. RRB signed that above pension bill into law in February, 2007.
That timeline has never been adjudicated, however, so proving any sort of quid pro quo will be very difficult if not impossible. Therefore, Pitch probably has a decent case.
posted by Rich Miller
Wednesday, Mar 18, 15 @ 11:35 am
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Here’s a poster boy the unions sure don’t need.
Comment by A guy Wednesday, Mar 18, 15 @ 11:38 am
Rich…..How about Gail Purkey who got a much bigger windfall than this guy…wasn’t she a lobbist for IFT??
Comment by scott aster Wednesday, Mar 18, 15 @ 11:40 am
“Dear ‘Friend’,
You’re not helping.
Signed,
All Unions with state pensions”
Comment by Oswego Willy Wednesday, Mar 18, 15 @ 11:40 am
I am available to sub for 1 day!
Seriously, that is an abuse of the taxpayers and it needs to be corrected.
Comment by Tequila Mockingbird Wednesday, Mar 18, 15 @ 11:46 am
Google “unconscionable contract”.
I’d make sure that was part of the defense.
Comment by John Bambenek Wednesday, Mar 18, 15 @ 11:49 am
When will someone, anyone, who is immune to the Tribies finally stand up and educate the public.
Its not the employees fault. IMHO, although I’m not an attorney (although I play one on TV), seems this is a slam dunk legally. I disagree with OW that this is bad for pension issue. This guy shelled out the entire contributions, played by the rules, and is now entitled to promised benefits. Heck, he paid enough. Tell all those other people who haven’t been funding their own 401K’s to put that kind of cash away for their retirement, and let them discover the pain of someone telling them ‘Oh, you didn’t earn enough, or save enough. I can’t pay you when you retire.’
Comment by Anonymous Wednesday, Mar 18, 15 @ 11:49 am
Frankly, this dude needs to lose, even if his winning would mean the pensions are better protected. This is a scam that truly is outrageous. But this guy is the ultimate insider outlier, and he’s always trotted out as an example of why pensions need “reform”. Unfortunately, none of the “reform” bills, where proponents use this goof as an example, limit the “reform” to just this guy, but go much further and attack the regular schmucks that have worked for the state, many for decades.
Comment by PublicServant Wednesday, Mar 18, 15 @ 11:49 am
This “pensioner” is who my colleges always bring up when they try to defend cutting my pension. He is the poster boy for that crowd, but he is the (almost singular) exception of how to game the system (his 6 figure “normal cost” payment doesn’t excuse him imo), not any way close to the average person who is receiving a pension.
Comment by Roadiepig Wednesday, Mar 18, 15 @ 11:51 am
Um… “- Anonymous-”,
It’s the optics. It’s an outlier the Unuons don’t need right now. Right. Now.
It has zero to do with the merits. It has everything to do with optics, “- Anonymous -”
Comment by Oswego Willy Wednesday, Mar 18, 15 @ 11:52 am
colleagues not colleges
Must proofread…
Comment by Roadiepig Wednesday, Mar 18, 15 @ 11:53 am
This is the stuff that I hate and, fortunately the legislature put an end to future abuses like these.
I hope he loses, 1 day of subbing should not get you a TRS pension.
Comment by JS Mill Wednesday, Mar 18, 15 @ 11:54 am
His actions were deliberately intended to defraud. He should be prosecuted.
Comment by VanillaMan Wednesday, Mar 18, 15 @ 11:55 am
He will probably win, which is a shame because this is the kind of thing that comes to mind when people think of govt employee pensions.
Comment by The Way I See It Wednesday, Mar 18, 15 @ 11:59 am
Most shocking thing in the post was this:
“From Piccioli’s press release…”
So he doesn’t only file a lawsuit to seek what he believes he’s owed but actively tries to promote it, knowing that this will hurt the union and members he once served, which earned him the pension in the first place?
Comment by With friends like these Wednesday, Mar 18, 15 @ 12:02 pm
Question for this particular teacher: how do you spell dirtbag”?
Comment by Anonymous Wednesday, Mar 18, 15 @ 12:03 pm
OW-
I agree 110%. The optics suck. But to my premise at the beginning…
When will someone in a safe political position, rise up and challenge the Tribies on their outlandish reporting and, dare I call it, malfeasance to their public interest responsibility under their Constitutional protection of free speech? Report accurately and fairly. They obviously can’t do that.
I suspect that if, after the ISC rules for the annuitants on SB1, the public is going to get a serious education about the fallacy of the pension ‘crisis’ and the ‘reforms’ that the GA can’t seem to get straight.
But yes, the optics are lousy.
Comment by Anonymous Wednesday, Mar 18, 15 @ 12:05 pm
Tequila Mockingbird — This travesty was corrected by the General Assembly. But of course it is brought up again and again by anyone who opposes public employee pensions.
It is going to be an interesting case to follow. As a retired educator on a pension, I resent that this person feels they deserve the pension increase because they gamed the system.
Comment by Nearly Normal Wednesday, Mar 18, 15 @ 12:07 pm
Piccioli is the reason I quit the IFT — Dan Montgomery circled the wagons and protected him. What he did is beyond sleazy.
Comment by ash Wednesday, Mar 18, 15 @ 12:07 pm
How many other “non-teachers” are collecting pensions from TRS?
Comment by Rufus Wednesday, Mar 18, 15 @ 12:11 pm
People like this guy and former Governor Edgar with the huge pension packages are outliers, but they really do hurt. This is not the fault of rank and file members nor is it typical of their benefits.
Comment by Carhartt Representative Wednesday, Mar 18, 15 @ 12:20 pm
=His actions were deliberately intended to defraud. He should be prosecuted.=
How can he be prosecuted when his actions were permitted under the law at the time? The law should never have been created, but it was legal at the time. I’m not a fan of this individual nor the law that allowed for this, but prosecution is a bit much.
Comment by Pepe Silvio Wednesday, Mar 18, 15 @ 12:32 pm
Who hired him as a sub? Make that person pay his rest-of-his-life pension.
Comment by Sir Reel Wednesday, Mar 18, 15 @ 12:34 pm
=Therefore, Pitch probably has a decent case.=
But definitely not Pitch Perfect.
Comment by Qui Tam Wednesday, Mar 18, 15 @ 12:37 pm
==Employees are required to pay all TRS contributions, both individual employee and employer shares so there is no taxpayer cost to the system.==
What a total misstatement. FOr these “authorized employers”, there is nothing normal about the “normal cost”. It is a tiny fraction of the true liability placed on the pension system by individuals such as Piccioli. There is ALWAYS a cost to the taxpayer, because the unions take folks near the end of their careers and give them giant raises with not enough time to compound interest. Then they piggyback off the normal cost calculated for EVERYONE in the pension system.
This article goes into detail on how the unions abuse this system to pawn off some of their most expensive employee pensions on the taxpayers. And it also demonstrates what the true normal cost should be for the unions:
https://citizenvsmachine.wordpress.com/2015/02/03/pension-busters-playbook-union-executive-bootleg/
Comment by nixit71 Wednesday, Mar 18, 15 @ 12:43 pm
The pension laws are very complex. Certified work is TRS and non-certified work is MRS. If they changed his pension base on a different interpretation of the legislation, the pension clause won’t apply.
Comment by Liberty Wednesday, Mar 18, 15 @ 12:44 pm
“Both pensions are based on an average of his six-figure salaries as a union lobbyist.”
Why is his private salary (not accountable to taxpayers) determining his publicly funded pension?
These people get publicly funded pensions just because of “their work on behalf of public education”? Can the roadbuilder lobbyists buy into public pensions because of their work on behalf of a well-maintained transportation infrastructure?
Comment by Pese Wednesday, Mar 18, 15 @ 12:45 pm
SURS Certificates of Annuity read: “No employee of SURS has the authority to bind the System to take action contrary to law, even in the even of misstatement of fact or law.” ” Accordingly, SURS is required under law to correct any mistake in benefit amount, even after payments have begun.” I suspect TRS would have something similar.
Comment by RetProf Wednesday, Mar 18, 15 @ 12:51 pm
“Hard cases, it has frequently been observed, are apt to introduce bad law.”
Judge Robert Rolfe, 1st Baron Cranworth
Comment by Anyone Remember Wednesday, Mar 18, 15 @ 12:56 pm
“How many other “non-teachers” are collecting pensions from TRS? ”
The broader question is how many people working for “authorized employers” are collecting state pensions?
Comment by Huh? Wednesday, Mar 18, 15 @ 1:01 pm
Revise that to read - … worked for “authorized employers” …
Comment by Huh? Wednesday, Mar 18, 15 @ 1:02 pm
==the unions take folks near the end of their careers and give them giant raises with not enough time to compound interest==
I think they are bound by the 6% rule just like any other employer.
Comment by Pot calling kettle Wednesday, Mar 18, 15 @ 1:12 pm
My guess is this guy will win, though I wonder what his pension would have been without that 1 day of substitute teaching.
Anon 11:49 - “It’s not the employees fault.” No, it was his plan. Not sure how you can cast him as a victim here. OW’s response to you is spot on.
Can’t believe Anonymous 12:03 & 12:05 are one and the same. Pick a handle! Perhaps Rich should change the default name for those who don’t insert one from Anonymous to “Lazy Bum” or similar.
Comment by Original Rambler Wednesday, Mar 18, 15 @ 1:15 pm
===If Piccioli’s lawsuit succeeds, the outcome may suggest to lawmakers that they cannot reduce pension benefits under any circumstances.====
It could also provide all the impetus needed for the people of this state to demand to change the Illinois Constitution.
Pigs get fat, hogs get slaughtered. This dude’s a total hog.
Comment by A guy Wednesday, Mar 18, 15 @ 1:15 pm
===I think they are bound by the 6% rule just like any other employer===
This is easy to bypass. As long as your tenure in the union is longer than 4 years (the time used in the final average salary calculation), this rule will not apply.
Example: The teacher-turned-union-executive doubles/triples his salary in Year 1 as the President of the IEA. He stays employed by the IEA for 6 years, receiving a 6% raise each year. He will receive his full pension benefit because the salaries used in his pension calculation (Years 3-6) are well beyond Year 1 when he received his huge pay increase.
The damage was already done Year 1. Yet they’re still playing by “the rules.” Illinois rules, that is.
Comment by nixit71 Wednesday, Mar 18, 15 @ 1:32 pm
At least he paid in both the employee AND EMPLOYER contributions. That’s more then the state has ever done.
Comment by DuPage Wednesday, Mar 18, 15 @ 1:46 pm
This happened because back in the day, the legislature specifically allowed it to happen. It was a “freebie” they could give one of their buds. Is it outrageous? Of course! But they passed it knowing full well the “exception” that it was creating. Or am I being naive thinking that they read what they pass?
Comment by girllawyer Wednesday, Mar 18, 15 @ 1:55 pm
I can’t bash a guy for getting everything he can out of the system that’s legal. No different than finding tax loopholes. I bet over half the people on this board would do what he is doing given the chance.
Bash the idiots for passing the law, not the law abiding idiots.
Comment by Anonymous Wednesday, Mar 18, 15 @ 2:10 pm
We are a nation of laws, not of men. However, I would be curious of the circumstances he did his substitute teaching (for one day). Was he qualified? Where did he do it? What did he actually do that day?
The ability to do this has since been corrected, but can the State ex post facto take away a pension that was earned within the law?
For the record, shame on whatever educational institution hired him for the one day (as a substitute) to get him into TRS.
Comment by archimedes Wednesday, Mar 18, 15 @ 2:15 pm
I believe it was Springfield Public School District that hired him.
Comment by Anonymous Wednesday, Mar 18, 15 @ 2:23 pm
===I bet over half the people on this board would do what he is doing given the chance.===
I’m sure not a favorite guy on this site, but I bet your statement is false. I think guys like this hog besmirch the character of way more than half the people on this board, and they wouldn’t do this.
Comment by A guy Wednesday, Mar 18, 15 @ 2:30 pm
According to an October 2011 article in the Tribune, Piccioli received a substitute teacher certificate in December 2006, then spent one day in January 2007 as a substitute teacher in a Springfield middle school, thus allowing him to claim his lobbying salary for TRS credit. This was interesting because, at the time Springfield was telling other applicants that they weren’t taking on new substitute teachers due to the abundance of retired teachers available (I know from experience). How did Piccioli and Preckwinkle (who subbed one day in a high school special education class) slide through? Preckwinkle’s wife taught in Springfield 186, so that may be his connection there.
In Preckwinkle’s case, the Trib noted that he applied for his sub certificate four weeks before the legislation passed and subbed six weeks before the window closed.
Comment by Just Passing Through Wednesday, Mar 18, 15 @ 2:35 pm
Where can I buy this $36,000 a year annuity for $365,000? How can this possibly be a low cost to the taxpayer? At his age his life expectancy is now over 80. This will cost us all a huge bundle. If it didn’t there is no reason for him to fork over that kind of money.
Comment by jeffinginChicago Wednesday, Mar 18, 15 @ 2:49 pm
Piccioli’s wife makes approx. $ 115K at SOS.
Comment by anon Wednesday, Mar 18, 15 @ 3:11 pm
I expect Piccioli will win his suit. What he did was sleazy, gaming the rules, and morally questionable but legal at the time. That loophole has since been closed by the legislature … but it is the legislature’s fault for creating the loophole in the first place.
I agree the optics are bad … and the unions should be the ones laying the blame squarely on the legislature for creating that loophole for two well connected friends.
Comment by RNUG Wednesday, Mar 18, 15 @ 3:23 pm
RNUG–so “the legislature” created the loophole for “well connected friends” but we should just squarely blame the legislature, not the well connected friends who sold it to the legislators and then took advantage of it? Nah, I think It’s fair to blame both the legislature and the union higher ups for giving birth to this one.
Comment by Responsa Wednesday, Mar 18, 15 @ 3:56 pm
This guy is a poster boy for something or other. Is it legal to “shun” someone in Illinois……until they leave the state?
Comment by Keyser Soze Wednesday, Mar 18, 15 @ 4:09 pm
Sleazy as his situation is, I believe it’s legal based on laws n the books at the time. He obviously is morally deficient but we can’t pick and chose who we want the laws to apply to
Comment by Former Merit Comp Slave Wednesday, Mar 18, 15 @ 4:13 pm
@jeffinginChicago
===Where can I buy this $36,000 a year annuity for $365,000? ====
Pension accounting uses complex math to enable the illusion that funding 30 years of retirement with 30 years of work is cheap.
Its not. A fully funded pension is a wonderful thought, but nobody has the stomach for the real cost.
Comment by Fred Wednesday, Mar 18, 15 @ 4:18 pm
===I bet over half the people on this board would do what he is doing given the chance.===
I’m sure not a favorite guy on this site, but I bet your statement is false. I think guys like this hog besmirch the character of way more than half the people on this board, and they wouldn’t do this.
We can pontificate on the hypothetical here, but the reality is that 99.9% of us will never have a chance to know for sure.
Comment by Six Degrees of Separation Wednesday, Mar 18, 15 @ 4:38 pm
And those with “pension envy” are gonna be disappointed no matter what.
Comment by Six Degrees of Separation Wednesday, Mar 18, 15 @ 4:50 pm
Anyone who has been around Springfield for more then ten minutes knows how the definition of Teacher in the TRS statute has been expanded to allow non-teachers to get coverage. It’s a disgrace how all of these highly compensated folks are allowed to gain TRS credit and end up with substantial pension salaries at the State’s expense. If someone wants to cause a real headache for these individuals think about having the IRS look into how it is a public pension plan is affording what are clearly non-public employees to gain membership in a public plan
Comment by Sue Wednesday, Mar 18, 15 @ 5:33 pm
It’s a shame that hard working teachers will be given a black eye because the union rep is feathering his own nest.
Comment by plutocrat03 Wednesday, Mar 18, 15 @ 6:16 pm
I worked for 28 years,retired three days before the bill was signed, and my state pension isn’t near what this guy draws.
Comment by Ticked Wednesday, Mar 18, 15 @ 6:49 pm
Congrats Piccioli. Your lawsuit made the national news. And not in a good way. Thanks to you once again Illinois is seen as a laughing stock.
Comment by Responsa Wednesday, Mar 18, 15 @ 8:09 pm
“Sue” what is your beef with TRS? Try to get hired there and no dice? You always seem to pop up with a snarky, and usually incorrect/misleading post any time TRS comes up here but rarely any other time.
Great idea to bring in the IRS. Not. Because any fine they might levy or sanctions they would impose would not fall on Piccioli and his homies, but the fund as a whole.
Comment by Arthur Andersen Wednesday, Mar 18, 15 @ 9:12 pm
AA, isn’t that the kind of thinking that retired Pat Quinn and gave us Gov. Rauner!?!
Comment by Original Rambler Wednesday, Mar 18, 15 @ 9:29 pm
Everyone’s upset with Mr Piccioli when we should be directing our anger at the people who wrote the rules that he apparently followed. It’s not a “loophole” if it’s part of the rules.
Comment by TRABOLO Thursday, Mar 19, 15 @ 5:57 am
You can’t blame him for jumping through the open window the GA provided for him. This is his end game and for the rest of his life. Optics are not HIS priority.
Comment by Robo Thursday, Mar 19, 15 @ 9:22 am
Who sponsored the 2007 bill that provided for this little treat?
Comment by Jake Arvey Thursday, Mar 19, 15 @ 10:39 pm