Illinois’ Tier II is in violation of the law and Pritzker’s pension panel almost says so.

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It was a decade ago that I stood on the floor of the Illinois Education Association’s Representative Assembly as a delegate and pleaded with them not to open the door to discussions with the General Assembly on pension reform.

Madigan would read it as our concession, I warned.

And that’s just what he did.

We lost the vote at the RA and a week later Tier II was born.

Beware of following union leaders blindly.

Greg Hinz reporting on Governor Pritzker’s pension panel report:

The shocker in the report is something that’s been quietly discussed for awhile in Springfield but has not until now become prominent. That’s the finding that the 2011 reforms may violate federal law.

Under federal standards, local pension systems that substitute for Social Security must pay at least the same level of benefits to get “safe harbor” status, a legal determination that the system follows the law. But, said the report, the creation of Tier 2 not only has irritated new workers who will get lesser benefits than those hired before 2011, but it has raised “significant concerns that the slower Tier 2 pensionable salary cap growth and revised final average salary calculation will be in violation” of Social Security law.

The report does not flatly state the state cut benefits too far, referring only to a “potential and costly safe harbor violation.” But the state would do better to fix it now, rather than waiting until later, when it might have to make expensive retroactive payments.

To deal with that and the “unique” circumstances affecting sometimes dangerous fire and police jobs, the task force recommended the state partially roll back benefit cuts for such workers in the 2011 law.

Specifically, it would revamp annual cost-of-living adjustment from half of inflation to the lesser of inflation or 3 percent, boost payments to surviving spouses to the Tier 1 level and base pensions on the highest four of the last five years of a worker’s career, rather than the current eight of the last 10 years.

Doing all of that would eat up part of the investment gains from consolidation, costing municipalities $70 million to $95 million, but might help the state deal with its safe harbor problem.

Of course, I was not the only one to warn that the day of reckoning would come. And some still choose to ignore the fact.

 

6 thoughts on “Illinois’ Tier II is in violation of the law and Pritzker’s pension panel almost says so.

  1. Nice, Fred………Here is praying “things” will turn in favor of the teachers……….Prayers, Best wishes,   cris

  2. Do they (the pols) wake up anew every day, the actual facts and information provided simply erased as they snore? This sudden epiphany was available to them even as they were planning Tier II in order to receive enough eventual promised cash to be able to float another massive loan.

    1. Yes to your first sentence, John. This never ends, & that’s why none of us can afford to be caught snoring. & you can bet there won’t be any of that at our IL Retired Teachers Assn. Convention next week! And, BTW (although I would hope that all retired teacher readers of this blog are already members of the I.R.T.A. AND their local units.
      If you’re not, go to irtaonline.org & JOIN NOW!
      There is strength in numbers.

  3. I read the panel’s report and your interpretation is incorrect on a crucial point: the panel did NOT recommend any change in the cost of living adjustment for Tier 2. What they recommended was that pensionable salary should grow at the lesser of actual inflation or 3%.

  4. I always enjoy reading Fred’s posts. As for being a trouble maker, whatever his stance on an issue he will fight for it. He is still a teacher and i still learn from him. Keep kicking ass Fred! As for our great backstabbing pols, before they make any moves they should lead by example and cut their own wages and benefits before they make or even think of doing harm to the very people who build and maintain Illinois and its city’s and towns. It has been proven so many times that our own workforce is needed. Let’s also stop the privation of jobs. As witnessed time in and time out, the tax payers get a piss poor end product while the pols get donations. All those wages that are spent in other states should be spent in Illinois. It would also slowly help the pensions to climb.

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