By Todd Mertz
The good news is that no pension reform bill was pushed through the General Assembly during either veto session for state employees and teachers.
However, legislators were told to keep the week of December 5th open, as they may return to Springfield to vote on pension “reform” for teachers and state employees.
The bad news is that there was a pension reform bill that quickly and quietly passed last week in both the House and Senate, impacting only Chicago Park District active employees and retirees. This bill (SB1523) increases the retirement age of current workers by 8 years, greatly increases employee contributions, greatly reduces disability payments to those injured on the job, and severely cuts COLA–even to those already retired. This bill impacts 6,100 current employees and retirees.
See how your rep voted on this unconstitutional attack on retirees’ benefits. See how your senator voted.
It is said that this SB1523 could be a template for reform for all state employees and teachers.
The We Are One Coalition, which represents teachers’ unions and other state employees, released a statement.
“SB 1523 unfairly slashes constitutionally-protected pension benefits and harms the retirement security of thousands of individuals and their families. Like most Illinois public servants, Chicago Park District employees and retirees are not eligible for Social Security.”
The legislation is expected to be signed by Quinn.
Of course he will–Quinn claims “he was put on this earth to pass pension reform.”
SEIU, the union representing about a third of these Chicago Park District employees, claims they will fight this in court, and already have a hotline established for retirees to join the lawsuit when the bill soon becomes law.
This could be the test case for all of us. Will the other unions join resources and legal defense teams to fight this bill? Will other bills follow the week of December 5th? Or perhaps in January when the spring legislative session begins?
Constitutionally of ANY Pension “Reform”
Fred Klonsky, retired teacher and pension and education blogger, was in Springfield a few weeks ago for an Illinois Retired Teachers Association (IRTA) meeting. The law firm Di Vito and Rothstein will represent IRTA when a pension bill passes.
Klonsky reported that a lawyer from the firm spoke at the meeting and reviewed the intentions of the drafters of the 1970 Illinois Constitution’s pension protection clause. The IRTA lawyer stated:
The pension protection clause protects retirees and does not distinguish between active and retired teachers. There is no question that the pension rights are fully vested.
It protects every fixed variable including COLAs. The court as recently as 1996 invalidated amendments that diminish benefits.
The clause is mandatory with no emergency exceptions, no matter how compelling.
It is not a matter of the state offering consideration. Consent is needed for any new deal.
The Media
Pensions are deferred compensation protected in a contractual agreement that commenced when a teacher started employment.
It kills me to read article after article that claims that the IL state pension system was designed to fail from the beginning. Benefits are too generous and expensive they claim. Much of the media reports that the pension system could never be supported and sustained by its own design.
FALSE. Just look at Wisconsin. Teachers in WI have traditionally paid less than 7% toward their pensions (less than 1% up until 2011), yet their pension system has been one of the highest funded systems in the entire country. And both Illinois and Wisconsin have similar benefits for retirees.
The difference? Wisconsin has made their mandatory payments to the pension system. Legislators, on the other hand, have skipped payments entirely or made minimal contributions for years, and are now designing legislation for teachers and state employees to suffer the consequences.
So, is the system itself sustainable by design? Of course it is.
The editorial boards, especially the Tribune, keep pushing for reforms with the most “savings.” The word “savings” appears again and again. In every article. Some legislators are bragging that their reform bill “saves” more than others’ bills.
Well, that “savings” they brag about should be replaced with the word “stealing.” Who can steal the most from the retirees who dedicated their lives to public service and made every required contribution?
It will be an interesting few weeks. Keep being proactive with your legislators–even if they voted “Yea” on the Chicago Park District pension reform bill.
Fred Klonsky 
If i’m not mistaken if they get a super majority vote in December this legislation becomes law immediately and no COLA will be given in 2014. Unless it goes to court and a stay is executed.
BTW, on Chicago Tonight WTTW there will be a discussion on the Park District Pension Theft. SEIU Local president and Park CEO will be there. I read somewhere that current retirees were not supposed to be part of the process but Madigan threw them in there at last minute with an addition to the bill. What a lovely person.
meanwhile, in Germany (taken from Der Spiegel):
The CDU wants to give more money to all retirement-age women who have raised children. The SPD is demanding long-term employees be allowed to retire at the age of 63 without any reductions to their pension payments. And both parties intend to increase benefits for low-income earners, disabled individuals and older employees who are no longer able to work full-time. The coalition is making it clear that it sees itself first and foremost as the grand coalition of senior citizens.