If it weren’t for the email blast from the Teacher Retirement System to members telling us about what they called the significant changes – the creation of a Tier III, we would still be in the dark.
Nothing from the leadership of any organizations that represent retired and future retired teachers.
It wasn’t until yesterday that Joe Cahill at Crain’s informed readers that the new budget would deepen the pension debt with another version of a pension holiday.
Only the Illinois’ Supreme Court’s ruling upholding the pension protection clause offers any protection to current retirees.
Thank God for Ms. Kinney and Mr. Green.
They were the delegates to the 1970 Illinois Constitutional Convention that made sure the pension protection clause was inserted because they knew no politician could be trusted with our pensions.
But the pension protection clause didn’t prevent the Democratic legislature from creating a Tier II which required teachers hired after January 1, 2011 to pay 9% of their salary into the pension system with a requirement that they work until they were 67 and receive a pension valued at only 6%.
I asked Senator Dan Biss about Tier III. He is one of only two Democratic Party candidates running for governor who got to vote on the budget package. The other is Scott Drury.
I didn’t talk to Drury yet.
Senator Biss responded briefly.
The creation of the Tier III plan is a bad idea that I oppose. Its voluntary nature made it fairly easy for me to decide to support the package notwithstanding that, but I was frustrated to see this proposal in the final package.
I find this response confusing since a voluntary option to put money into a privately managed annuity paid for by TRS and local school districts is key to Tier III. It is a foot in the door for Rauner’s plan to turn all public pensions into private annuities.
Thanks for your brief response.
I think that Tier III – along with the change to the estimated return on TRS investments – are terrible ideas which are not mitigated by the voluntary component of Tier III. I look forward to talking about this when we schedule a date for you on our radio show/podcast.
Thanks — likewise looking forward to it. So just to make sure I understand, you think the assumed rate of return on TRS investments should be higher than it is now?
The change by the legislature reduces the amount the state pays into the system. It will increase the liability. Where does the so-called $1.5 billion in savings come from? Shifting costs to the local school districts and reducing the amount paid into the system by rolling back the change to the assumed rate of return on investments. The action of the legislature increases the assumed rate. Just to make sure I understand, you voted to return to the old assumed rate which is higher.
Oh I see, sorry. You’re talking about the so-called “smoothing”? Yeah I hate that.
I don’t know, folks. Is it just me?