The Tribune Resurrects “Pension Crisis” Again…
In the latest Tribune editorial, “Even pension loopholes are protected? Then amend the Illinois Constitution,” the readers are provided with egregious acts of double dealing and slippery allowances that provide for the very cagey to get away with getting more than they should have in retirement benefits.
It makes a teacher with 34 consistent years of work and experience cringe. At first it seems objectionable. And…maybe it is?
In short, public workers who took leave from their positions to work for the unions representing them sued to be given their pensions for time served in (what was arguably) a not-public, now private position. Other seemingly malicious examples included an individual who served as a lobbyist but later subbed for one day to receive an eligibility in the Teachers Retirement System.
The heart of the issue was whether a law written and signed by then-governor Pat Quinn preventing those who sought leaves of absence in lobbying or other union positions could continue operating as if employed by their original public union. Prior to the law (Act 97-651) enacted in January of 2012, personnel who worked as public employees within a school, labor force, or service provider could request and receive a leave of absence from their position to work within the union leadership – and make continued payments to their retirement pension plan based upon the salary or earnings they were receiving from their employment while on leave.
In example, Ms. Kendall departs her position of 10 years as a teacher and takes a position as an IEA contract-negotiations advisor in the northern half of the state. Before Act 97-651, she would elect to pay the portion of her earnings to the TRS to secure the promise of her retirement benefits at the end of her career. This would include the possible return to her teaching position if she so chose. Act 97-651 disallowed those payments, creating a severance from her union representation and the original promise made in the Pension Contract Clause of the Constitution. ““Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.” (Article XIII, Section 5)
In writing the Act 97-651, the Justices of the ILSC found that this particular attempt to find a means to blunt earnings without identifying the responsibility for the “questionable employer” created an ambiguity which undermined the constitutionality of the Act at the outset.
¶32 “We find that, regardless of the purpose of the benefit and the merits of the suggested utility of the benefit, it was a matter for the legislature to decide. And, as Kanervanoted, “[w]e may not rewrite the pension protection clause to include restrictions and limitations that the drafters did not express and the citizens of Illinois did not approve.” Id. Accordingly, we hold that the circuit court correctly determined that Public Act 97-651 was unconstitutional to the extent that it eliminated as a pension benefit for current participants the ability to earn union service credit previously bestowed by the legislature.”
And within the opinion’s conclusion by Justice Thomas:
¶65 “We find that the circuit court properly held that, with respect to participants who were already members on the effective date of Public Act 97-651, the denial of the future ability to earn service credit on leave of absence for labor organization employment violated the pension clause of the Illinois Constitution. We reverse the circuit court’s judgment dismissing the portions of plaintiffs’ complaint that alleged a violation of the pension clause of the Illinois Constitution related to Public Act 97-651’s change in the law to deny the use of a union salary under section 8-226(c) or 11-215(c)(3) to calculate the “highest average annual salary.” We also reverse the circuit court’s rulings on the parties’ cross-motions for summary judgment that resulted from the circuit court’s construction of section 8-226(c)(3) to include defined contribution plans within the definition of “any pension plan.”
So, if Ms. Kendall had returned after 12 years of paying dutifully into her pension obligations for her IEA position and then performed another 12 years of work and pension payment, well, what’s wrong with that? Maybe she’d be part of the mass of retired public workers in Illinois earning approximately $10,000 less than the median earnings of workers in the United States ($62,175).
But, the Tribune and its confederate Illinois Policy Institute have begun another assault on the concept of any defined benefits in retirement owed to those who toil for the state of Illinois.
“The solution to the state’s multifaceted pension crisis should be crystal clear to taxpayers. The Illinois Supreme Court isn’t going budge. The pension clause needs to be amended.”
EMPHASIS on pension crisis,labor bosses, and plenty of outlier examples that make a normal pensioner take an unsettled notice. On the other hand, the Tribune editorial identifies 11 of the more than 200,000 retirees of public labor unions who worked long and industrious careers for the people of the state of Illinois. Eleven…
And, therefore, the Tribune and IPI rail that we need an amendment, but remember my friend, neighbor and reader: Even with the amending of the pension protection clause, the UNFUNDED PENSION LIABILITY WILL REMAIN.
In the editorial’s accompanying cartoon by Stantis, a pop-eyed taxpayer is held in a small cage with a behemoth Frankenstein entitled “Pensions.” It is not really the outliers that bother the Tribune or the IPI: it’s the existence of pensions, collective bargaining, and any benefits at all.
"TRS benefits are not responsible for the majority of the unfunded liability at TRS. “TRS actuarial reports show that 66 percent of the unfunded liability over the last 15 years was caused by contributions from state government that failed to meet the “full funding” levels set by actuaries. For instance, between FY 2014 and FY 2017, the state’s total contributions were $7.2 billion short of the actuarial requirement.
“In addition, the chronic lack of proper funding from state government means TRS does not have that money to invest, and those “unrealized” investment returns over time account for 27 percent of the TRS unfunded liability, along with the cost of issuing pension bonds and other miscellaneous factors. Of the $578 million increase in the state’s annual contribution to TRS for fiscal year 2018, only 4.7 percent is attributable to benefit increases. According to the group “Illinois is Broke,” over the last 15 years 50 percent of the TRS unfunded liability is the result of underfunding by state government, 25 percent from pension bond costs and miscellaneous items, 21 percent from unrealized investment profits and only 4 percent from benefit increases.”
As long as the Tribune and the IPI deny the already huge deficit created by the shorting of pension payments from the state of Illinois over decades in order to divert Ms. Kendall’s payments and others to avoid the real costs of running a government, nothing will ever be corrected, not really.
Instead of facing the actual issues and finding a means to correct them, they scapegoat those who have already fully paid into their retirements.
It’s not just the bizarre and hyperbolic examples that the Tribune and the IPI want to paint broadly across the minds of those willing to be beguiled. It’s all of us, even those of us who forsook social security and earnings to work for the benefit of students, those in need of services, or in maintaining our state’s infrastructure. Feel guilty? That’s what the Tribune wants. Feel like someone is scapegoating you? They are.
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