Labor coalition on pension proposal

The We Are One Illinois labor coalition, which includes IEA, IFT, AFSCME, the Illinois AFL-CIO and other organizations representing public sector workers, issues the following statement in reaction to Gov. Quinn’s pension plan announcement. NOTE: According to Gov. Quinn, the proposal would have no impact on those who are already retired.

WE ARE ONE ILLINOIS STATEMENT ON PENSIONS

Responding to Gov. Pat Quinn’s news conference on pensions held Friday, April 20, Illinois AFL-CIO president Michael Carrigan issued this statement for the We Are One
Illinois coalition of unions that represent public employees:

“The unions representing public employees are committed to working with Gov. Quinn and the members of the General Assembly to find a solution to the pension funding crisis
caused by the state’s failure to pay its share.

“It is crucial that the pension problem not be compounded by an unconstitutional solution that is unfair to public employees who have always paid their share. 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.

“Despite the willingness of the unions to engage in substantive discussions, our organizations were not asked to be part of Governor Quinn’s pension working group. We were
invited to just four meetings and only a few days ago received any data by which to judge its proposals.

“We strongly disagree with the proposals made today. Considering that the subject at hand is the ability of hundreds of thousands of Illinoisans to support themselves in
retirement, we believe the proposals are insensitive and irresponsible.

“By appearing to endorse these unfair and unconstitutional cuts, the governor has made the process of finding common ground much more difficult.

“Forcing public servants to choose between two sharply diminished pension plans is no choice at all. It is a clearly illegal attempt to solve the problem caused by past
governors and the legislature solely on the backs of teachers, caregivers and other public workers.

“Public employees must be treated and heard as full partners in any substantive discussions. No one has a greater stake in solving the problem than we do. A serious problem
deserves a serious effort at a solution. The unions are ready.”

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Comments

  1. We need to follow a lead of several other states that either do not offer retirement benefits to legislators, or phased out such benefits recently. This is a just way to go, since it was legislators who for 20 or 30 years raided our pension systems to provide funds for their own benefits, or pensions for their cronies, who never really worked as state employees.

    Here are the states that do not offer pension benefits for legislators:
    http://www.usatoday.com/news/nation/story/2011-10-11/state-legislators-pensions-records/50523328/1

    And when you read this, check salaries of state legislators. Illinois, the most bankrupt state in the nation, pays them most. Don’t you think there’s a relation between these facts?

    Again, we need to follow other states and eliminate salaries for state legislators. Pay them only modest per diem to cover their expenses when they are called to Springfield.

  2. James Beal says:

    Maybe the fully funded General Assembly and Judicial retirement funds can be raided to help fund TRS.

    • Scott Meyers says:

      unfortunately, this won’t help because these pension funds are far smaller and actually have a worse unfunded liability than TRS. My suspicion is that their contributions can’t match the benefits that accrue faster and at a greater % than ours, but I don’t have numbers to back that up on hand. Even worse, in the public dialogue, we all get lumped in together,except that TRS’ big liability #gets thrown in because it is the largest, while ignoring that we have the largest # of members. We all need to call our lawmakers individually and encourage ou colleagues to do the same.

  3. K. Thompson says:

    It is imperative that we not allow our governor and state legislature to pass this pension reform. Just because the state was irresponsible with OUR money, does not mean we have to pay for their mistake. How about getting rid of all the special interest groups that we spend millions of dollars on each year for needless research and testing. Here’s an idea, lets reform welfare, food stamps, state housing. What about a program to get the poor back on their feet instead of just GIVING them food, health care and housing? We have put in our years and money for our future.

  4. Annilise says:

    It is time for both the State and Federal Legislatures to reduce their pension funding, reduce their medical coverage, require them to live with the same medical care/funding as the rest of the country; apply the same limits and years of service to the legislative & executive branch-no pension for elected officials other than the minimal we are to receive. Let the State of Illinois fulfill its obligation to return the money stolen from our pension fund to pay other State bills.

  5. Mike Ellberg says:

    It is not whether you think TRS should be modified or not (some teachers have suggested that it should). This is about what is legal and what maintains the legality of the pension code in our state’s constitution.

    Lets look at Quinn’s proposal (or according to the Civic Committee of Chicago’s website, its their proposal):

    1. A 3% increase in employee contributions.
    -States have ruled that when raising contributions, the employee must then get greater benefits.
    -Interesting facts. If the state raises teacher contributions by a mere 1%, that would raise approximately 100 million dollars. Therefore, a 3% raise in contributions would generate approximately 300 million dollars. This is less than 1% of the 46 billion dollar deficit. Furthermore, why would they then be asking us to do this if it will not help close the deficit? However, closing corporate tax loopholes is estimated to provide Illinois with 3 to 5 billion dollars in revenue.

    2. Reduce COLA to lesser of 3% or ½ of CPI, Delay COLA to earlier of age 67 or 5 years after retirement and Increasing the retirement age to 67
    -This would be in direct violation of the Illinois Constitution’s Pension Protection Clause
    -Illinois Appellate Court Justice Gino DiVito said: “As courts in this State have confirmed, this language is crystal clear. Public employees become members of a pension system at the time of hire or shortly thereafter and once they become members, their pension rights are set and cannot be diminished or impaired. This is exactly what the framers of the State’s 1970 Constitution intended. Pension rights of current employees simply cannot be diminished as the Chicago Tribune has contended.”
    -Illinois State Bar Association President John G. O’Brien said: “We have reviewed the legal arguments for and against retroactivity. We believe that the Illinois Constitution and relevant court precedents are clear that current state employees have rights in their pensions that cannot be retroactively diminished or impaired by later acts of the General Assembly.”
    -The only legal arguments for pension reform have come from the law firm Sidley Austin LLP, which coincidently was paid for their findings by the Civic Committee of Chicago (the people and money behind this reform). Therefore, it is plausible to accept that their findings were of bias and not impartial.

    3. Phasing in the responsibility for paying normal costs of pensions to each employer, including school districts.
    -This would force school districts to raise taxes (if the public voted yes)
    -This would mean cash strapped districts would be laying off many teachers
    -Class sizes would go up
    -Contracts would end being for little or no raises for the foreseeable future (this would be in the state’s best interest because final salaries would be lower which would mean lower pensions)

    In conclusion, one must realize it’s not how you feel or how your neighbor feels or even what the Chicago Tribune writes about this subject. It’s about what is legal and what can be enforced. I believe through my research that what Quinn is proposing is 100% unconstitutional. However, what scares me is that the powers of the IEA could do a backdoor deal with the Governor. I believe that would send a horrible message that our Pension Protection Clause is not worth the paper it is written on (this could also lead to individual lawsuits against the state). If that would happen, it would suggest that if a constitutional contract can be broken, then how can any contract be enforced? I believe at this critical time is the exact reason behind the origin of the state’s pension protection clause and why it was created. If a governor can create an unconstitutional pension proposal and have the general assembly pass it, then what protection did the pension clause offer to begin with?

    Here are some resources to look at and share with friends:
    http://www.senatedem.ilga.gov/index.php/phoca-download/category/58-pensiondocs?download=287%3A04-14-2010-illinois-%20%20state-bar-association-reducing-current-pensions-is-unconstitutional

    http://blogs.chicagotribune.com/news_columnists_ezorn/2010/04/counterpoint.html

    http://teacherpoetmusicianglenbrown.blogspot.com/

    http://www.senatedem.ilga.gov/images/pensions/C/Judge%20Gino%20Devito%20Memo%2005-05-10.pdf

    • Great job Mike I too worry that a back door deal has already been made and we cannot allow this and should be ready to do anything needed to stop this!

      • Mike Ellberg says:

        Thanks for the reply.
        There are several questions that need to be answered:
        1. Does the IEA have the authority to negotiate my constitutional protected pension? Aren’t they called “rights” because they are non-negotiable? Our school contract has specific language in it that it is a contract with our local union. However, the constitution does not indicate any relationship with unions.
        2. At the 1970 state constitutional convention, is there any evidence that the originators of the pension protection clause gave that authority to the IEA? I can’t find any mention of the IEA in the constitution. Is it unreasonable to accept that the pension protection clause was put in to protect future employees from not only the General Assembly but their own unions as well?
        3. What happens if some unions negotiate and others don’t?
        4. I still don’t understand how paying a higher contribution rate helps pay down the unfunded liability. As I pointed out above, a 3% hike in our contribution ends up contributing less than 1% of the total liability. Therefore, why would the unions be saying that they are ok with this? Why would we give Springfield more money when they couldn’t manage our current contribution rate efficiently? The state of Arizona already ruled that it is unconstitutional to have employees pay more for their retirement and get less benefits.
        Finally, I am a supporter of the IEA. I appreciate everything they do for public education. However, I am curious of the legalities of putting our “protected clause” on the negotiating table.

  6. 1. There’s nothing in this plan that prevents robbing the retirement funds again. The legislators will extract money from us to cover what they failded to contribute over the years, pat themselves on the back for solving the alleged problem,, and start underfunding and borrowing from the retirement funds again.

    2. Let’s start a petition demanding that Illinois joins other states that already have abolished retirement benefits (pension, healt insurance etc.) for all state legislators. In addition, leiminate slaries for the state legislators – provide them only with reimbursement of travel costs to and from Springfield and living expenses while in Springfield. It’s time to end the very existence of career legislators.

    http://www.usatoday.com/news/nation/story/2011-10-11/state-legislators-pensions-records/50523328/1

  7. Rick Van Roeyen says:

    The state is very concerned that too many teachers have received Excellent ratings over the years, so a new evaluation system has been created to uncover those who may not be as excellent as their ratings have indicated. Now let’s get this straight, we want the very, very best teachers to be retained by school districts, right? So, it makes sense to force individuals who may be completely done with teaching intellectually, emotionally and physically into a position where they “must” continue to work with students whether they are intellectually, emotionally, or physically capable of this doing this work or not, right? Well, just until their 67. Will the state pay for assistants to help us get from room to room when we are 67?

    • Barb Plate says:

      Be careful…age is not an indication of one’s ability to be effective in the classroom. For me personally, I feel that my most productive years were the last ten. (I retired in Illinois at age 61, partly because of a negotiated buy-out. Then I taught six more years in a different state, and had a great experience. I just retired again at age 68. BTW I get no additional retirement amount, since the state in which I now live combines a state plan and Social Security, for which I am not eligible. Unfortunately, this state retirement funding problem is throughout the country, and public employees need to very vocal all over the U.S.

  8. Rick Van Roeyen says:

    Has anyone noticed that the phrase, “unfunded liability” is the political catch phrase of the decade. What does that mean? To me it means, “I am a little short with the rent this month, is that O.K.?” I know what the response from the landlord would be, do you? Let’s just try to think about using that line with anyone you owe money to… “Uhm…ya, I’d really love to pay you for the products I purchased, but it turns out that I really didn’t have the funding to make that purchase in the first place, so let’s make a new deal.”

  9. Rick Van Roeyen says:

    It would appear that Mr.Quinn is aware of, but not happy with the proposals that the joint committee has been working on at his direction. Perhaps his premature announcement is meant to draw attention away from those proposals. The debts of the state of Illinois are the responsibility of the state and ALL the citizens of the state. Teachers and other public employees should not be forced to carry the financial cost of bills that have been neglected by the state. Regardless of what bills the state owes, the honorable thing to do is to pay honestly incurred debts. These legal wranglings are an insult to the democratic process and the people of this state. The Governor and his people are clearly stating that they will merely do whatever they please, and wait to see if those who are impacted are willing to take these unconstitutional changes to the courts. This is a sad example for our children. We have leaders that are purposefully violating the constitution without shame.

  10. Mark Emmons says:

    Ok
    Limits on payout to a maximum(i.e., 100K)-ok
    Limits on age-ok
    Limits on COLA to CPI-ok
    Apply the same limits and years of service to the legislative & executive branch-no pension for elected officials unless they have served 35+ years in the SAME position.
    Plan for making up failed contributions required by state-don’t see it.
    Where is the pain for the governing body?

    • Yes! The average GARS recipient has only 14 years of service and receives about $80,000 in pension/year. TRS, SERS, and SURS should be fully funded before anyone gets a dime out of JRS and GARS.

  11. Kevin Morton says:

    The time for “sitting at the table” is over. The time for readying the lawsuits is now.