Randy Fritz. “Pension reform.” He who names it owns it.

– Randy Fritz is a retired teacher.

He who names it owns it.  It is true about many things, but particularly of what has become known as “pension reform.”

Full disclosure:  I am a retired teacher receiving a TRS (Teachers’ Retirement System) pension.  I’d like to think my opinions, here, would not change if that weren’t so, but in honesty I cannot be sure.  What is being proposed is not “pension reform.”  In fact it is, more accurately, “pension theft.”  Let me explain why.  (What I say here is about my particular pension but is true of all Illinois public pensions.)The money in the TRS is my money.  A part of the agreement I made when I became a teacher in Illinois was that a portion of my salary would be set aside and put into a state-controlled pension fund, and that amount would be matched.  When I retired, I was told I would receive pension dollars for the rest of my life, based on my salary and years of service, as well as reasonable health insurance.  Therefore, unsurprisingly, I did not save large amounts of dollars elsewhere, believing the pension would be there for me (as guaranteed by the 1970 Illinois Constitution).  If that pension system had not been available, I would have made different retirement plans.

“What?” you say.  I’ll take out more than I put in.  True, if I live long enough—the average teacher does.  True just as it is for Social Security:  the next generation, through pay deductions, funds the pension of current retirees.  When they retire, in turn, they will expect and receive the same.  The number of teachers is not expected to decline in the future; the fund is self-perpetuating.  (Remember:  the Social Security trust fund is “in trouble” [not really] in twenty or thirty years—not now—only because the wealthy pay into the system on just the first $106,000 or so of their earnings, no more.  Those who can most afford to pay into it, in other words, pay almost nothing compared to normal working Joes.  If they did, the fund would be solvent forever.)

“What?” you also say.  I get cost-of-living increases (COLAs), which are unfair?  Also true (that I get them, not that they’re unfair).  These pensions hardly equip one for luxurious living.  A friend of mine recently commented that his pension, self-funded as a lawyer, would never provide a COLA.  I suggested, then, that we trade pensions.  Guess what his answer was?  He made long-term plans for his retirement.  But I did too—through TRS.  With no COLAs those teacher pensions, in time, would be worth less and, little-by-little, impoverish those depending on them.  Increases were never slated to be more than the actual increase in the cost of living (and were part of the deal).  And remember:  we take a huge hit on Social Security, if we even qualify for it (I do)—something like a 40 to 60% cut.

The only reason the pension funds in Illinois are in trouble is because the state of Illinois has consistently and intentionally underfunded their promised share.  It was easy for legislators to do so:  there was enough money in the fund for now; “we’ll worry about what is needed later.  We’ll use available appropriation for what we need to spend money for now.”

Then, a few years ago, the Great Recession made proper funding impossible.  The funds are falling behind payments due now, but only because of the that earlier underfunding.  (Politicians are, in general, chickens.  It was easier to “underfund” in lean years, as I said, than raise taxes.)  We (current & future pensioners) didn’t squawk nearly enough back then—we should have.

The excoriation of teachers has been, seemingly, well-planned to coincide with this financial crisis.  “Why should we pay those lazy, overpaid, unionized, long-vacationed, don’t-care-about-kids idiots?” goes the argument.  Well done:  your demonization has won the day.

It’s not true, though.  Most teachers I know (including myself, I hope) do their best to do a good job with decreasing resources and progressively larger classes.  There is dead wood, of course, as in any other profession, but it’s hardly the norm.  I firmly believe the current bad attitudes toward teachers is part of a concerted effort to de-legitimize public education.  There is lots of money in public education and the moneyed interests would just love to get their hands on some of it.

The bond rating agencies that have downgraded Illinois securities, Moody’s and Standard & Poors, are the same firms that continued to rate the “toxic waste” (a Wall Street term) as Aaa right before those synthetic derivatives poleaxed the markets in 2008 (for those who know, I’m talking about CDOs and credit-default swaps).  These are the same agencies, by the way, that rated US government securities, for a time, lower than that toxic waste.  That Illinois suffers from bad bond ratings from these fools (who continued to rate the “toxic waste” highly to acquire other business from investment bankers) serves only to show how rigged the securities game is.

So, we are in the midst of “pension reform.”  It is something our politicians tell us we must do.  “Defined Benefit pensions” (another term of artifice) are just too expensive.”

Liars.

Hey General Assembly:  your job was/is to return my money to me—you took it in the first place and promised to return it, under specific circumstances, in the form of a pension.  You promised to match my contributions.  In fact, you have a fiduciary responsibility to do so.  That’s not just what you promised, it’s what the 1970 Illinois Constitution promises.  Now you’re reneging on all that, or planning to.  Now, in other words, you’re not going to pay it back per the terms I understood as I was paying in.  And, somehow, all that has become my fault.

I’d laugh at the whole thing if it wasn’t so sad.