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Rauner touts pension reform law

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Illinois

* Press release…

Gov. Bruce Rauner today signed House Bill 418, which prevents retired police officers from opting into the pension system a second time if they return to the force as a police chief or join another municipality’s force.

This bill will protect taxpayers from situations in which police officers are collecting two pensions from the same pension fund — a problem known as “double dipping.” Police officers that are promoted to police chief or join a different force will enroll in 401(k)-style retirement plans instead of opting into the pension fund again.

“Illinois taxpayers can’t afford to pay the same person twice,”Gov. Rauner said. “This bill is an important step to help control Illinois’ unsustainable pension costs. It will protect taxpayers from pension fund abuse while still ensuring our police officers are fairly compensated for their service.”

The bill was sponsored by two Naperville Republicans after controversy over whether a Naperville police chief should be able to accrue new pension payments while simultaneously earning a salary of over $168,000 and collecting payments from his first pension.

“Illinois’ pension systems are in dire need of repair as our pension liabilities at both the state and local levels continue to rack up,” said Sen. Connelly (R-Naperville). “While I recognize that many changes need to occur within the current system, this law at least gets us going in the right direction.”

posted by Rich Miller
Thursday, Aug 24, 17 @ 11:29 am

Comments

What??? If you get a new job as an officer in a new municipality, you don’t get to participate the pension program? That doesn’t even make any sense.

Comment by NoGifts Thursday, Aug 24, 17 @ 11:33 am
You might not even be vested yet from your previous job.

Comment by NoGifts Thursday, Aug 24, 17 @ 11:33 am
Does anyone know how to look at whether Grant Wehrli gets pension credit from being on City of Naperville Council? Did he take the state pension as well when elected to GA? I don’t know how to look that up.

Comment by 360 Degree TurnAround Thursday, Aug 24, 17 @ 11:39 am
Not good enough legislation. If they are going to work as sworn officers they should not be collecting the extra pension benefits provided to sworn officers to retire early because the job is dangerous.

Comment by LIberty Thursday, Aug 24, 17 @ 11:47 am
I thought the purpose of an early retirement age for civil servants was due to the rigors of the job? Collecting retirement benefits is an acknowledgement of that.

Retired cops can become PI’s. Retired firefighters can go work for private insurance companies. Both can open bars. There are many options in the private sector for post-retirement work for civil servants.

Comment by City Zen Thursday, Aug 24, 17 @ 11:48 am
If this new law is suggesting you cannot draw a pension while working in a new position, I am not opposed. I think early retirement (prior to age 65-ish) and double-dipping are particularly problematic. I would prefer the pension system more accurately mirror Social Security in these regards.

On the other hand, if a person transfers from one municipality to another, one agency to another, or one university to another, etc., they should still be allowed to vest themselves in the same plan they began, until fully vested.

Comment by H-W Thursday, Aug 24, 17 @ 11:48 am
How about no more defined benefit plans for anyone?

Comment by Ron Thursday, Aug 24, 17 @ 11:52 am
== Does anyone know how to look at whether Grant Wehrli gets pension credit from being on City of Naperville Council? Did he take the state pension as well when elected to GA? I don’t know how to look that up. ==

Multiple web sites have that information. For one, go to the Open the Books web site. Think they let you look up 5 before having to register. Registration is free, but you will get some PR and fund solicitation emails.

Comment by RNUG Thursday, Aug 24, 17 @ 11:57 am
Good idea, Ron. I make a motion to start the petition drive to get a constitutional amendment to affect it on the next general election ballot in 2018 because that’s what it’s going to take.

Comment by GA Watcher Thursday, Aug 24, 17 @ 11:57 am
Ron - As you know, when people work in the private sector, the employee and the employer pay into the Social Security retirement system, regardless of whether or not the include additional retirement plans. If you recommend “no more defined benefit plans for anyone,” then what pray tell would you recommend for those employees who have paid into the state system? How would they then switch to the federal system, which would become mandatory? Would the state of Illinois then be obligated to the federal government regarding future FICA contributions? And how would the state reimburse employee contributions made prior to your model?

Comment by H-W Thursday, Aug 24, 17 @ 12:01 pm
== How about no more defined benefit plans for anyone? ==

Ton, you DO realize Social Security IS a Defined Benefits plan?

Comment by RNUG Thursday, Aug 24, 17 @ 12:05 pm
Still would like to see one & ONLY ONE government pension for any individual - the only exception being the military.

Comment by s k hicks Thursday, Aug 24, 17 @ 12:15 pm
Good legislation, Rauner can’t even take credit because his team is a mess.

Comment by Almost the weekend Thursday, Aug 24, 17 @ 12:24 pm
City Zen- yes the reason cops can retire earlier than most is the physical and mental demands of the job for front line positions.

Most of the cops who retire from one police job and take another police job are high ranking officers whose job was administrative for many years before retiring and they are taking a high ranking administrative job in their new department. In other words they are paper tigers that don’t have the same wear and tear on them.

Comment by Freezeup Thursday, Aug 24, 17 @ 1:17 pm
More of this. Double dipping contributes enormously to the cynicism the public has about public employee pensions generally.

Comment by The Way I See It Thursday, Aug 24, 17 @ 1:31 pm
RNUG, at least SS can and does get changed as people live longer, inflation is low, etc. Not so with the Illinois abomination of defined benefits.

Put public workers on SS and a 401k system with no guaranteed match and be done with it.

Comment by Ron Thursday, Aug 24, 17 @ 2:27 pm
HW, public employees should get SS and a 401k with no guaranteed match. Tier 1 employees wages should be freezed indefinitely.

Comment by Ron Thursday, Aug 24, 17 @ 2:32 pm
== Put public workers on SS and a 401k system with no guaranteed match and be done with it. ==

If the votes are there, it can be done for new state hires.

Comment by RNUG Thursday, Aug 24, 17 @ 2:59 pm
Check out the video of this bill signing Rich put up in an earlier post. Senator Connelly provides an interesting analogy of the legislative process before he introduced the Governor: “You can’t win the World Series with a grand slam. Sometimes you need to get a single and a double and a sacrifice bunt and a sacrifice fly.” Wonder if the Governor was listening.

Comment by GA Watcher Thursday, Aug 24, 17 @ 3:20 pm
Ron:

Your diatribes against public employee pensions are growing tiresome. The jealousy is palpable.

Comment by Demoralized Thursday, Aug 24, 17 @ 3:31 pm
No jealousy, I’ll be fine. Easy for me to leave. The state of Illinois won’t be though. No state except West Virginia is losing population faster than Illinois.

Comment by Ron Thursday, Aug 24, 17 @ 3:49 pm
When are you leaving, Ron?

Comment by Anonymous Thursday, Aug 24, 17 @ 7:59 pm
What about the Illinois State Police? Several former retiree’s are collecting 6 figure pensions and are now working as police chiefs’. Lockport, Lemont, Metra, Metropolis, Edwardsville are just a few that come to mind. They are working under a different pension system and it looks like they will still be able to collect two public pensions.

Comment by Anonymous Thursday, Aug 24, 17 @ 8:40 pm
== at least SS can and does get changed as people live longer, inflation is low, etc. Not so with the Illinois abomination of defined benefits. ==

We’ve explained before that the 3% AAI is slightly less than long term CPI-U. So that is, in actual effect, essentially no different than a Social Security COLA.

As to other changes in Social Security …

* They don’t affect the already retired

* They haven’t lowered the actual return / pension calculation formula (it was already relatively poor for the high earners)

* They don’t affect people within 10 or less years (sometimes longer) from retirement (admittedly, that is more of a politics consideration but it does grandfather in existing benefits for a significant group)

* They do (partially) subsidize the health insurance (Medicare) because, once retired, regardless of how much the actual Medicare premium goes up in a year, the retiree’s Medicare payment can not increase any more than their Social Security payment increases.

To summarize, Socisl Security is quite similar overall to the State Retirement Systems, and, while not protected by a Constitutional Clause, SS benefits are rarely reduced.

Where Social Security is different is

* Contributions are capped at a certain salary level that raises with inflation, unlike the State where you pay your retirement “tax” (forced contribution) on every dollar

* In practice, you can max out your Social Security benefits with only 80 quarters (20 years) of contributions. In most of the State systems, you have to contribute for 45 years to max out benefits. The main exception to that is the life/safety positions where max is either 26 or 32 years, depending on coordination status.

* Retirement age is occasionally and very gradually raised (I’ll give you that one)

* Social Security provides wider benefits for survivors (but not necessarily more in absolute dollar amounts). The spousal SS survivor gets the full SS benefit of the spouse if it is greater than their own; a spousal State survivor gets 1/2 of the state pension minus any increased SS benefits (if applicable) and, in some cases, further offset rule reductions. Note: the people hit hardest by the offset rules are (a) teachers who don’t contribute to SS and / or (b) retirees who also have SS credits from non-state employment but can’t collect on them.

To summarize, the two systems are different. Depending on which benefit item you pick, it can be better or worse.

Comment by RNUG Friday, Aug 25, 17 @ 12:44 am