“Step Right Up”
HT: GB
A close friend of mine once turned me on to a song by Tom
Waits of which I hadn’t been exposed.
I’m not totally square, Dude. I
mean “Small Change” and “The Piano Has Been Drinking” were always old
favorites. So, when my friend said, “You
gotta get an earful of ‘Step Right Up,” I had to try it out.
I love it when you feel like someone behind your eyes is
forcing open your senses: your pupils suddenly pushed open, your hearing
laughing out loud, feeling wrinkles on my chuckling cheeks …
“Step right up, step right up,
step right up,
Everyone's a winner, bargains
galore
That's right, you too can be
the proud owner
Of the quality goes in before
the name goes on
One-tenth of a dollar,
one-tenth of a dollar, we got service after sales”
For the last week,
many of us have been asking what was the sweetener that brought the
over-a-dozen Republican votes to the budget battle? What did we (unions, etc.) give up to induce
them into voting an override?
Then, the answer:
Senate Bill 42. Pages
270-283 of the same bill. Not the budget
bill.***
Step right up, new
hires and Tier 2 teachers and state employees.
If you feel like you got suckered into paying down the unfunded
liability caused by decades of not reimbursing the normal costs, we (the General
Assembly) are going to give you an option to break free! Captain of your own financial ship!
“Three for a dollar
We got a year-end clearance,
we got a white sale
And a smoke-damaged furniture,
you can drive it away today
Act now, act now, and receive
as our gift, our gift to you
They come in all colors, one
size fits all
No muss, no fuss, no spills,
you're tired of kitchen drudgery”
Tier 3 now enters stage very far RIGHT! An opportunity to provide the beginning of
Governor Rauner’s plan to reduce, if not completely destroy, the state employee
unions in Illinois. A chance to give up your defined benefit (a pension) for an IRA.
So, I looked
through the legalese on those pages this evening. Now mind you, I am not a lawyer or politician,
but I do comprehend “Step Right Up,” so maybe that qualifies.
Here is what
I see:
Here’s what I wonder:
·
Implementation
to occur as soon as possible after passage; thus, January of 2018?
·
New
members or old (Tier 2) have 30 days within which to make this selection.
·
To
opt into the defined contribution or to opt to stay within Tier II is an irrevocable
decision?
·
Determination
of a final average salary will be increased to the average of the last
ten years of earnings.
· Such earnings cannot exceed the federal
Social Security wage base in effect at that time. Currently $127,200.
· No retirement annuity unless the
participant has attained 67 years of age and meets the other necessary
criteria.
· Multiplier is now at 1.25% for each year
of service time’s final average salary. No longer 2.2.
·
Increases
in annuity payouts are provided annually as measured by the BLS measurement of
the consumer price index, but such payments will be 1/2 of the unadjusted
measure of the consumer price increase.
·
Survivors
will be provided 66 and 2/3% of the dying spouse's retirement annuity at time
of death.
·
Employees
not contributing to a defined contribution shall part with 6.2% of their salary
to the retirement system. And this cost will not be more than the 6.2%
unless such employees have decided to make contributions to the defined
contribution plans available under this act.
·
In
addition, the 6.2% can be lowered by agreement of the State Actuary and CGFBA
to a lesser amount if the "normal costs" are reduced. If the
normal costs increase, the rate shall be capped for employee at 6.2%.
Neither of these variations are involved in those who choose a defined
contribution.
· Tier 2 and new Tier 3 hires can choose
to join a defined contribution plan that "aggregates " employer and
employee contributions. The term aggregate means to add together; i.e.,
participants pay in and are given a match or sweetener to do so by the employer.
This is likely a cost
shift to districts.
· Tier 2 or 3 members who join the defined
contribution plan will pay 4% of salary to the plan. The employer shall
pay an additional amount, not beyond 6% of the employees salary and no lower
than 2%. I see no basis for the differences. Is
this a negotiated item???
· The State Board of Investments and
private sector companies will help plan investments. Hello, Ken Griffin and Gov. Rauner’s friends. !
·
Earlier
collected earnings in TRS may be rolled over into the plan based upon
authorized federal law and the retirement system as long as qualified plans.
The concept of “qualified plans” leaves much to be desired.
I remember that Bernie Madoff met ERSA requirements for “qualified plan”
before later changes.
· Each retirement system will reduce the
employee's contributions to the contribution plan by the costs of administrative fees and costs
of offerings (think
advertising, 10b1's, etc.)
So, it would
appear, a smattering of Republicans came forward to help the state of Illinois
from falling into the fiscal abyss, but they and the Democrats also voted for a
possible end of the unions they for whom have so long sworn allegiance. Can’t win fair share? Then, let’s offer a defined contribution.
Smart and clever
move? As a former member of TRS replied,
“Let me remind you that any money that TRS would not receive from a active
teacher needs to be make-up by the state of Illinois. The money owed to
TRS by the State must be paid and they should know that.”
“We need your business, we're going out of
business
We'll give you the business
Get on the business end of our
going-out-of-business sale
Receive our free brochure, free brochure
Read the easy-to-follow assembly
instructions, batteries not included
Send before midnight tomorrow, terms
available,
Step right up, step right up, step right
up
You got it buddy: the large print giveth,
and the small print taketh away”
You can count on guys like me and Bruce... |
And that, my union friends, is the fine
print of our budget deal.
Step Right Up:
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