The following points represent the We Are One Illinois Coalition’s position on a pension model currently receiving attention that is commonly referred to as the “consideration model.”
The hundreds of thousands of workers (teachers, firefighters, nurses, police and other public employees) represented by We Are One Illinois oppose this purported “consideration model” because it fails the test for good pension law:
• It is not constitutional;
• It is unfair in its outcome;
• It will not solve Illinois’s long-term pension funding obligations; and
• It will exacerbate the challenges those obligations pose by kicking down the road to a future day implementation of a lawful funding solution.
The following core points explain the why this plan is not constitutional. Additional legal analysis of its unconstitutionality is set forth in this memo.
• This supposed “consideration model” violates the Illinois Constitution.
The Illinois Supreme Court has now made it clear in two cases (the state “SB1” case and theCity of Chicago case) that unilateral changes to diminish the pension benefits belonging to any member of a retirement system are unconstitutional.
The model commonly referred to as “the consideration model” also fails the constitutional test because it offers pension system members (regardless of Tier I or Tier II) a choice between two versions of diminished benefits. There in fact is NO CONSIDERATION in the legal sense. A public employee would be forced to choose between two options, each of which illegally strips away pension benefits. This is a construction that the Supreme Court has expressly ruled violates the Illinois Constitution Pension Protection clause.
Consideration requires some countervailing substantial new benefit that the pension holder must be able to accept or decline. This suggested new model offers no such thing; in fact, it offers a choice between reduction of two already protected pension benefits. Therefore, it is unlawful.
• This supposed “consideration model” will not survive a court challenge and therefore will only worsen Illinois’ fiscal position.
If passed into law, such a plan will be swiftly challenged in court. When the Illinois Supreme Court rules—yet again—that diminishment of pension benefits is illegal, the state’s pension systems will surely be further underfunded and the pension payments the state must pay will be larger. Simply put, our problems will only be harder to solve. A vote for such a plan is a vote to kick the can down the road, a vote to not solve Illinois’s fiscal challenges.
The We Are One Illinois coalition strongly urges all legislators to abandon pursuit of illegal pension benefit diminishments and work instead on lawful, rational and fair approaches to funding Illinois pension systems.