Saturday, July 4, 2015

Active Tier I Teachers and Tier I Retirees! Join IRTA NOW!

"We can make pension changes to those still working, right?"

Three years or so before my retirement from teaching, a very good friend and young colleague complained to me about the distraction the upcoming departures had on the too many of my elder companions leaving so soon.

“I’m really tired of hearing all of you trying to figure the square of the hypotenuse of the percentage of income when you all leave,” she muttered.  “There should be something better to do with an educated mind.”

She was right, of course. An advisor with the state office for the Teachers Association was the person with all the answers, and only a phone call away.  And, ironically, she was only a year or so behind me in the pipeline to retirement.

And, even though calculating accurate numerical numbers in the English Department was an unlikely prospect, an educated mind should be able to see the future a bit more clearly than just a monetary number.

If I knew what I now know, I believe I could have made a very strong and educated  commitment to do at least one thing: join the Illinois Retired Teachers Association even years before I retired.

Let me explain why. 

For as long as anyone can remember, the State of Illinois has reneged on its duty to pay into the pension funds of its State workers.  In the last half century, Illinois has also avoided the “promises” to fully pay into the pension funds that are protected by Article XIII, section 5: ”Membership in any pension or retirement system in the State…shall be an enforceable contractual relationship…the benefits of which shall not be diminished or impaired.”   Even though it would seem an a priori argument to require appropriate payment, the General Assembly continued to shirk the expectation for decades long after the inclusion of the Pension Protection Clause in 1970.

The Illinois General Assembly – a bi-partisan collection of legislators – has always dodged and sidestepped every opportunity or request or demand to provide the appropriate amount to the pensions, and it is likely they will do so again – regardless of the Illinois Supreme Court’s unanimous decision striking down SB1. 

"They can choose a 401K as a better alternative."
This is not opinion – it is both history and what State leadership is saying at this moment.

In 1995, acting as if the General Assembly had suddenly come to an epiphany regarding the money owed ($17 Billion at the time), legislators decided to create a “ramp” to make sure they were held to the payments necessary.  The “ramp” was designed to allow for minor payments in the beginning and finally swept upward in impossible costs by the end of the “pay-back” in 2035.  In truth, the ramp provided them with an ability to forestall full payments until many years later.  The Committee of Government Forecasting and Accountability found that from 1985 until 2012, Illinois pension liabilities grew by over $87 Billion.  More than half of that increase came from the State’s not paying its share.  That is why – despite the hue and cry from the Tribune and other corporatist enemies of all things pensions – that they now face an unfunded liability of well over $100 Billion. 

On April 14, 2010, in less than 24 hours both chambers of the General Assembly created a Tier II to absorb the costs of the growing unfunded liability.  Retirement age without penalty was extended until age 67, Cost of Living benefits were eviscerated, and retirement benefits were capped despite continued high salary contributions to the pension systems.  In short, Tier 2 was designed to help and ultimately pay off the liability accrued by the General Assembly.  

In December of 2013, the General Assembly passed SB1, a bi-partisan bill designed to curtail the benefits of current retirees and all Tier I active teachers.  The law provided a severely reduced schedule for Cost of Living, figured a salary cap for active Tier I teachers, offered defined contribution plans for current employees, prohibited sick leave accruals, and supplied a statutory promise of payments from then on into the pension funds.  Legislators Rep. Nekritz and Sen. Raoul predicted a savings for the state (in the previous bill owed) of hundreds of $Billions. 

"I think we can find a choice like Sen. Cullerton had - with SB2404."

IRTA lawyers were leaders in the battle to overturn SB1 as unconstitutional, and they were successful.  Indeed, even a somewhat contrite Representative Nekritz confirmed the admonishing tone of the Court’s unanimous decision during a recent interview.  President of the IRTA Bob Pinkerton exclaims, “Special thanks to Tabet, DiVito, and Rothstein for leading the battle in court. The IRTA attorneys were the leaders among all the attorneys involved and made an outstanding presentation to the Supreme Court.”

On the other hand, current leader of the State Governor Rauner has indicated his wish to return to a plan much like the proposal offered by Senator Cullerton in 2013 as an alternative to SB1:  A bill that provides a specious form of “consideration,” like Cullerton’s original SB2404 which provided a choice for health care or a cost of living benefit.   In Rauner’s vision, he would offer an opportunity for Tier I employees to join a defined contribution (401K) or remain in a reduced benefit pension plan.  According to his mouthpiece Tribune, Rauner believes that there is still the possibility that we can move forward from where we are “with Tier I as well as Tier II and possible III, to develop an optional (or required) 401K system for teachers.” 

Our new Governor, who is not much of a reader, has evidently not perused the recent decision by the ILSC declaring SB1 not only illegal in its attempt to recoup money that should have been given to the pension funds, but also affirming the Pension Protection Clause for even active Tier I teachers currently in the classroom.

From page 20 of the Supreme Court Decision/Analysis section of the majority opinion delivered by Justice Karmeier.  “The protections afforded to such benefits by article IIII, section 5 attach once an individual first embarks upon employment in am position covered by a public retirement system, not when the employee ultimately retires…Accordingly, once an individual begins work and becomes a member of a public retirement system, any subsequent changes to the Pension Code that would diminish the pension benefits conferred by membership in the retirement system cannot be applied to that individual…”

Despite the recent Supreme Court decision on SB1, Rauner believes that retirement benefits are set and remain static after initial employment.  

"You get what you get the day you start, not at the end. Right?"
And the General Assembly?  Have they learned any lesson?  Will they seek new revenue streams like progressive taxes, services taxation, transaction fees, amortization of the unfunded liability, re-design of State bill paying operations, etc.?  Or will they once again allow a mob mentality – like those that brought us SB7, Tier 2, SB1 – to elude the responsible path? 

This last battle cost us all in IRTA over $1/2 million. 

NOTE:  Active Tier I Teacher, these continued efforts to diminish and impair your future hard-earned retirement income will not cease.  You need protection from an organization that will not waver in their defense of your earned benefits.  Join IRTA now.

NOTE: Retired Tier I Teacher, this year the US Supreme Court will hear a case for those who wish the benefits of collective bargaining without having to pay for such advocacy.  Have you paid forward your share for yourself and for those about to retire? 


  1. I could not attend any Independence Day activities today, the Fourth of July.
    Why? Read the full blog carefully.

    1. Many of us Tier 1 retirees could not attend, for typical reasons of one or more combinations of the following:

      1) Had to go to work, as my pension doesn't cover all my bills.

      2) Spouse needed the car, and since retiring, only can afford one car, and no public transit in my location.

      3) The monthly tank of gas has to last until the August pension payment arrives.

      4) Social security called and said they had a hard time finding mine. After subtracting most of my government pension off of what I should have gotten, my social security was so small it almost wasn't there at all. One of the rewards of teaching in Illinois.

      5) I was tired from another sleepless night worrying about Rauner attacking my pension.

      6) I am sick but am trying to get better without seeing a doctor. Those deductibles and co-pays add up fast.

      7) Seeing the politicians that voted for SB7, Tier 2 and SB1 in the local parade makes me vomit. I wouldn't want it to hit any innocent bystanders.

      8) Helping a friend paint their house to prepare it for sale. They were SB7ed for being at the top of the pay scale after decades of teaching, but not old enough to qualify for their pension. They are being forced to sell the house and move in with relatives.

      9) Visiting friends or relatives who are home bound or in nursing homes.

      10) Babysitting the grandkids.

      Ken, if your answer to "Why?" is "None of the above", then you got me. What is your reason Why?