-John Dillon blogs at Pension Vocabulary.
As we retirees make 2016 New Year’s promises and resolutions that might guarantee a few months or hopefully years of enjoyment of a life well and long lived, let’s be careful not to accept the Springfield political falsehood that we ourselves are responsible for any exacerbation of the Illinois pension shortfall.
Now or in the future.
Seven months into a budget stalemate, Governor Rauner may kick and scream that he’s against unions, and Madigan’s party may lockstep in their battle against Rauner’s crazed agenda-first demands – but be assured that both sides would gladly dismantle our pension systems if they could.
There’s money to raid.
Meanwhile, as the embattled and insouciant-appearing governor plans a Tier 3 with a 401K savings plan to replace a defined benefit, we should remember a couple of things:
One would be Chief legal counsel Eric Madiar’s reminder to the Chicago City Club that regardless of the increased costs of pension benefits over the years, “pay increases were actually less than actuarial projections…the state’s failure to fund the pensions (is) the main reason we are in this mess.”
Second would be how they tried earlier when constructing SB1. Remember?
If not, read this earlier post from 2012.
The oldest individual in Illinois passed away last Monday in the East St. Louis area of Illinois. An announcement came on Saturday, coincidentally, while in Chicago the state House and Senate leadership came to an impasse regarding what to do about breaking earlier promises of benefits to Illinois’ public sector workers. This includes the COLA, which remains a particularly sticky problem for the lawmakers who realize the likelihood or possibility of unfavorable litigation if they alter (i.e., diminish or impair) the benefit.
Mayette Epps-Miller, born on April 15, 1901, was 111 years old. Identified in surveys of the elderly as a “supercentarian,” one who lives beyond 110, Mayetta was considered by her remaining family to have been the “rock…who pulled everyone together” (http://www.daily-chronicle.com/2013/01/06/east-st-louis-woman-dies-at-111/aupdc7e/). Such an obituary would leave most of us smiling for the lady. You go, Mayetta.
On the other hand, if you are a lawmaker in Illinois, this is as frightening as a constituency version of “The Walking Dead,” except the zombies are feasting on much-needed dollars. Never mind that the dollars were owed them to begin with.
Talk to any legislator in Illinois, he or she will be quick to remind you that we are living too long now. They say that such changing actuarial demographics make the continued payment of benefits into later years impossible or injurious to payments to later public sector workers.
Of course, an Illinois legislator won’t tell you that the real issue is the colossal sums money diverted for nearly half a century, funds owed but not paid to public sector workers.
Nevertheless, while they would be right to remind that we are living longer than before, that also creates an even greater need to maintain the compounded COLA.