Nekritz needs to do her homework on pension buyouts.

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The latest pension blather in Springfield comes from the Republicans and their best friend across the aisle, Democratic Representative Elaine Nekritz.

Two versions of a pension buyout bill have been filed in the House.

Represenative Mark Batinick, Republican from Plainfield is the sponsor of one of the pension bills.  That would be House Bill 4427.

Republican Representative Mike Fortner from West Chicago has filed House Bill 5625.

Both versions would allow state employees at retirement to take their pension benefit as a lump sum rather than as life-long pension as a defined benefit

Elaine Nekritz chairs the House Personnel and Pensions Committee. The Committee is scheduled to hold hearings on both bills today.

I wouldn’t pay much attention to this if it were just a Republican bill. But Nekritz is a powerful Democrat. She led the fight to pass the unconstitutional Senate Bill 1.

“We want to explore all those options,” said Nekritz.

At this point, no actuarial studies have been done to determine how the numbers would work out. The Commission on Government Forecasting and Accountability is working on some projections, but they are not completed yet.

Nekritz says, “It’s not going to have any significant impact on the unfunded liability or the contribution the state has to make to the pensions.”

Well, then, what is this about?

I figure this is a way to cheat future retirees out of their money. Or why put it out there?

Fortner’s version of the legislation does not use money from the pension systems to make the lump sum payments. Instead, qualified vendors would make the payments to retirees and then receive the full pension benefits from the state pension funds that would have gone to the retirees. The vendors would decide how much of a retiree’s total lump sum to keep as an expense. The amount would have to be disclosed upfront to the retiree.

The lump sum wouldn’t come directly from the public employee pension fund, but would be handed over to a middle man – the vendor – for a fee. How would they determine what the lump sum would be? What if the actuarial figure was a million bucks over twenty years. You can bet they would try and offer the retiree $800,000. That might sound pretty good to the retiree at the time. Yet compared to what the retiree would earn from their defined benefit plan, it is the the equivalent of thievery.

The vendors would decide how much to keep as a fee.

This is nothing more than another privatizing scheme with profits going to the so-called vendor. It’s no different than those places that charge usury rates to poor folks who borrow an advance on their income tax return.

Only worse.

Nekritz said she anticipates several hearings will have to be held on the plans to bring in additional experts who can advise lawmakers about who is likely to participate in such a plan, how many people would participate and how it has worked in the private sector, where similar proposals have been used. “We’ve got a lot of homework to do here,” she said.

I’ll say she does.

And don’t just put down the answers, Elaine.

Show your work.

For a good explanation of the benefits of defined contribution plans see Glen Brown’s blog post he put up today.

Unions concerned with Pearson investments.

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The impact of opt out and the movement against high-stakes testing has been impressive when it comes to Pearson’s bottom line.

The British publication Professional Pensions reports that Pearson, a UK-based company that controls much of the U.S. school testing business, has lost 42% of is share value in the last year.

Chicago Teachers Pension Fund, Trade Union Fund Managers and 130 individual shareholders joined Unison in the resolution that will be heard at Pearson’s annual general meeting this April.

The resolution said the company was over-reliant on the education testing programme in the US, which had been affected by a recent change in the law and was also becoming increasingly unpopular. It comes as the company revealed last month it was axing 4,000 jobs – 10% of the company’s workforce.

Unison Capital is a major investment firm, which owns 33,000 shares of Pearson.

The coalition of unions and public employee pension funds, including the CTPF and the AFT control another 40,000 voting shares of Pearson.

“Rather than continue to focus the business on politically poisonous high stakes testing, and axing the jobs of thousands of employees, chief executive John Fallon should be conducting a wholesale reassessment of Pearson’s strategic vision.”

We are retired. Not dead.

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-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.

Read the entire post here.

You know that 7% pension pick-up that CPS wants to take away? Don’t believe their hype.

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-By John Dillon

The Illinois Policy Institute is angry once again with what their editorialist Diana Sroka Rickert considers another unnecessary handout to Chicago teachers:  the Pension Pickup.

In her December Tribune editorial last week, Rickert urged Chicago’s besieged Mayor Emanuel and CPS CEO Forrest Claypool to end the current practice of providing pension pickups for the Chicago Teachers Union.

“While (they) have busied themselves asking state taxpayers to send hundreds of millions of dollars Chicago’s way, they’re unwilling to use the $174 million that’s already available for them to use for teacher’s pensions.”

But they’re not the peculaters.  The real culprit?  Read on, please.

Chicago teachers are supposed to pay 9 percent of their salaries toward their own retirement savings.  But instead, teachers pay just 2 percent; the rest of the “teachers’ contribution” is picked up by taxpayers, thanks to a clause negotiated into their contract6s in the early 1980s.”

As a retired educator from a suburban district I suppose I could feel a little miffed with having paid 9.4% of my salary each paycheck, instead of 9% like those in the CTU.  Adding to that, if CTU paid only 2% of the 9%; well, why didn’t I get such a deal?

And that’s exactly what Rickert and the IPI want all of us to do.  Let’s not think it out or look into it.  Let’s just be blind angry.

The “deal” that Chicago teachers got in the early 1980s was actually a mandated law by the General Assembly in 1983.  And this statute (40  ILCS 5/17-130.1) provided the opportunity for retirement contributions to be considered part of the negotiating process in salary and benefit settlements during collective bargaining.  In fact, all districts in Illinois got the same deal.

“An Employer or the Board may make these contributions on behalf of its employees by a reduction in the cash salary of the employee or by an offset against a future salary increase or by a combination of a reduction in salary and offset against a future salary increase.”

Teacher’s Union:  We’d like to ask for a 2% increase in our wage benefits across the board this next contract.

Board of Education:  We’d like to find a way to do that.  How about a ½% increase across the board, and we’ll pick up 1.5% of your contribution costs per person?

If` you’re still not sure how this works, it means that my union never debated with the Board over my 9.4% payment.  But just down the highway at another district near the airport, they did and paid only 4% of their 9.4% requirement.

Read the rest of the article here.

Pasgual LoPresti on the Illinois Supremes.

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-Pasqual LoPresti

Too bad you missed it Fred. It actually made me believe in the justice system again.

The only bad part was the live feed we watched it on. The video was very choppy and would constantly freeze up but at least we were able to get I’d say 90% of the audio. At times I could swear 9fingers was hacking the feed someway.

Here is my take on it:

A gang of Shitty Hall lawyers all prim and proper on one side that as taxpayers, we retirees pay to go against us.

On our side our lawyers, Mr. Kristof and Mr. Shapiro, who have taken the case on contributions from us, so in a way we pay them also, but gladly.

After a few BS presentations, (I swear these people are zombized) they march out a representative of the municipal pension fund and one from the laborers pension fund. Yes.  The very people who are to look out and properly fund our retirement. To make a long story short, both reps told the court that they slapped the retirees and survivors faces for our own good.

Then it was back to the Shitty Hall lawyers and the judges stopping them at various points to ask them questions or clarify what they just said. They seemed a bit irked at what they were hearing.

Now it gets even better.

By the Shitty Hall’s lawyers own admission the City didn’t pay anything into the funds because by law they didn’t have to.

Amazing argument, right?

The pension funds were well funded, one was funded at 133% and that came from the Shitty Hall lawyer.

Again amazing argument, right ?

I wonder what magic formula they have that you can keep taking from a fund and not put anything into it and by the way that was the retirees money that we paid out of our checks, so if I may add, they stole our money and Daley is walking around a free man. And in fact Daley stole 250 million from the laborers pension fund to shore up the police and fire pension. Then tried again the next year but was stopped.

Amazing, isn’t it?

They also brought up the point that the unions 27 of 31 agreed to this so called reform. The very unions that CAN’T REPRESENT RETIREES BY LAW.

Amazing isn’t it ?

Our two lawyers were smooth and good and not once questioned by the judges. They had a very well presentation prepared with no bumps or curves. They brought up the fact that not one retiree was present at any of these so called reform talks, so how can they say we the retirees agreed to this.

Amazing isn’t it ?

Bottom line folks. Don’t hire any of the Shitty Hall lawyers, not even for a parking ticket ?

And Fred. May I add to your like of music the song by John Lennon, Instant Karma. It plays well with.this.

Hell I even have a smile on my face today !

TRS was rightly quick to calm fears. But this still stinks.

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When State Comptroller Leslie Munger announced earlier this week that the state could not afford to pay it’s share of public employee pension contributions, the folks at TRS were rightly quick to point out to members that this would not impact us receiving our monthly pension check.

Since the beginning of Governor Rauner’s holding hostage the state budget to advance his union-busting turnaround agenda, this has always been a fear.

Yet, simply saying that we get our checks doesn’t mean that we, along with thousands of other citizens of the state, are not being hurt by the hi-jacking of state government by the Governor’s political agenda.

Munger says state pensions won’t receive a state payment in November. There will probably be no state payment in December. She has previously said that it is possible that there may not be a payment for six months.

My friend John Dillon asked TRA Communications Director Dave Urbanek if the state has to pay an interest penalty for missed payments.

Mr. Dillon:

There will be no interest rate applied to the delayed state payment for November. State government appropriations to all agencies that are part of that government do not fall under the Illinois Late Payment Act.

Sincerely,

Dave Urbanek

And then there is the loss that nobody I know can calculate for me. How much are we losing by not having the money owed to us to invest?

The missing payment is nearly $600 million a month.

If the worst case scenario comes to pass and we are not paid until June, we are talking over $6 billion. $3 billion*

Uninvested. Money lost that we will never get back.

Amanda Kass of the Center for Tax and Budget Accountability explained it to me this way:

“Delay in payments undoubtedly has an impact on investment returns–think of a personal savings account as an example, interest earned from $100 being in the account for 12 months is more than $100 being in the account for only 9 months. Quantifying the impact of the delayed payments in terms of investments (and in-turn future state payments) is quite difficult.”

So, how much?

Too much.

*When I first posted I made a typo when I wrote $6 billion.

Munger suspends payments. More pension theft in Illinois.

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Senator Kwame Raoul, “It depends on what the premise of what he wants. He could say he wants to put me in slavery. Right? Should I meet him halfway?”

There were a lot of frightened public employee pension recipients yesterday when the news flashed that Illinois Comptroller Leslie Munger said she didn’t have the money to make pension payments.

I got tons of email and more than a few phone calls.

I posted twice on this yesterday, including reposting an email that TRS Communications Director Dave Urbanek sent out explaining it did not impact what TRS was paying out to annuitants.

This has been a point of confusion since the state budget battle began. We do not receive our pensions directly out of the state budget. Our monthly pension check comes out of TRS funds, which are completely separate.

Where do TRS funds come from? We teachers pay into it. We have never missed a payment. Our school districts pay a small amount into it. The state of Illinois pays into it. Until a few years ago the legislature more often than not failed to fund it at the level they were supposed to and took frequent pension holidays. And then there is the return on investments.

You don’t need to be an expert on high finance to see that the last source – return on investment – is fully dependent on all the others. The more we have to invest, the more we get in return. The current situation in which we are less than 50% funded means TRS has less to invest and receives less in return.

The rate of return on TRS investments has been pretty good over the years. Which means if we were funded at the level we were supposed to be, we would be in great shape and there would be no pension crisis now.

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When Comptroller Munger fails to make the state’s $560 million payment in November, that is money that cannot be invested or bring a return. With no budget agreement there will be another missed payment to TRS in December. These are dollars lost on investments that are lost forever, even after the missing payments are made up, if they are made up.

Why is there no budget agreement?

Because Governor Rauner will only agree to a budget if the legislature votes to include his union-busting turnaround agenda.

Without a budget, only those programs that are federally mandated or court ordered will be paid.

And first in line ahead of even those payouts are the banks that hold bonds, the state’s debt.

Because state debt is a profit center for Rauner’s friends on Wall Street.

Some have called on the Democrats and Rauner to compromise, meaning that the Democrats would agree to some of the union-busting demands of Governor Rauner.

I’m with Democratic Senator Kwame Raoul on this.

“It depends on what the premise of what he wants. He could say he wants to put me in slavery. Right? Should I meet him halfway?”

Meanwhile our pension theft continues.

As I reported earlier, the state once again will not be making pension payments. Retirees will receive our checks.

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Illinois Comptroller Munger. No money for pension payments.

Dave Urbanek of the Illinois Retirement System issued a press release confirming my previous post that the refusal by Governor Rauner to back off of his union-busting demands to pass a state budget means payments will not be made to the systems.

Individual retiree pension payments, which are not dependent on the state passing a budget, will continue.

While Comptroller Munger makes assurances that the payments to the funds will eventually be made, the failure to pay on time means that our funds cannot be invested and will lose money in returns on investments.

For Immediate Release                                                                       Contact: Dave Urbanek

October 14, 2015                                                                                 Public Information Officer

                                                                                                                  Office: 217-753-0968

                                                                                                                  Cell: 217-720-3961

                                                                                                                  durbanek@trs.illinois.gov

 

November TRS Pension Checks Unaffected by State Cash Flow Problems

SPRINGFIELD, IL — All Teachers’ Retirement System pensions and benefits will be paid in November on time and for the foreseeable future, despite an announcement today that cash flow constraints will delay the payment of state government’s November contribution to TRS.

“All TRS pensions and benefits are funded exclusively from the TRS trust fund and not from the state budget,” said TRS Executive Director Dick Ingram. “TRS currently has $46 billion in the trust fund to pay all pensions and benefits and monthly benefit payments total approximately $460 million.”

State Comptroller Leslie Geissler Munger said today that because her office will not have enough cash on hand to meet all of state government’s bills in November, the state’s November payment to all Illinois pension systems will be delayed. The November payment to all of the state pension systems is approximately $560 million. The TS portion of that payment is approximately $312 million.

In fiscal year 2016, state government appropriated $3.7 billion to TRS as its annual contribution to the retirement systems. Normally, that contribution is split up into 12 monthly installments. This year, each of those installments is about $312 million.

Comptroller Munger indicated that even though the November installment of the state’s contribution to TRS will be delayed, she is confident that TRS will receive the entire $3.7 billion annual contribution by the end of the fiscal year in June.

“We have been working very closely with the comptroller’s staff and we understand completely the extremely difficult position her office is dealing with,” Ingram added. “Comptroller Munger and her staff have been extremely responsive and helpful to TRS.”

Pasqual LoPresti: Rauner and Rahm and the pension boards.

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-By Pasqual LoPresti

Now isn’t that all cozy…and all that bullshit about them butting heads I been saying all along…don’t believe for one minute the Hollywood scripted good cop bad cop, it’s all for show

This is another sad comedy so to speak when you don’t know whether to scream in anger or shed tears over the fact again the deck is stacked. This so called board of 8 is made up of four 9house appointees, 1 judge ( who may be fair or may not, I have no knowledge of her ) and 3 legit members. Reminds me of the laborers pension board four appointed by 9fingers, three local 1001 so called union members that are proven bedfellows to 9fingers and no way represent their members any more and one ( now get this ) retired member who supposedly we voted into that position to represent the retirees even tho by law we can’t be represented ( go ahead say it “HUH” ) . Now if a vote was needed and just say the union people were legitimate ( to which no way in hell that would be true ) the worse that could happen is a tie and im sure it’s built in 9fingers could break the tie. This so called pension board voted the retirees cola and health care benifits away ON OUR BEHALF. Well thank god they looked out for us even tho the law says to leave us alone.

We took them to court a great lawfirm is representing us and won the 1st battle we had our colas restored by order of the court and 2 days ago we recieved backpay for 9 months. Now we are onto the restoration of our health care benifits that our great union 1001 gave away. Which for 2 people non medicare will cost us 1812.00 per month and in 2017 affordable health care which is another joke. Ok get ready for this, our city lawyers that as tax payers we have to pay go against a lawfirm we also have to pay ( granted our law team will sue the city for payment but in the meantime we are sending donations in ) go ahead say it, “HUH” In fact if I’m allowed we are having a fund raiser Oct 24th and I would like to invite anyone interested to come out and it would be a great honor if Fred came out..see our Facebook page

Like I said we don’t know if we should scream or cry but at least they know not to mess with us old farts

*** Fred the site name listed on my info has been changed so we could go public sites name is City Workers Present and Past and we welcome anyone in Illinois that is current or retired municipal employee or aim is to grow a political force with no ties to any party all we require is a candidate that has heart and is for the people

Keeping retirement weird. Jeb Bush’s “free stuff” and Rhode Island pension theft.

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Jeb’s grandpa, Prescott Bush.

This week Republican presidential candidate and presidential bro/son Jeb Bush told Black people to stop expecting free stuff.

That’s quite the thing to say to the descendants of America’s slaves.

No group of people in America has given away more free stuff than Black Americans. Maybe tied with Native Americans.

Jeb’s ancestors had a different history.

On another note, this morning’s NY Times has high praise for Rhode Island’s Governor Gina Raimondo for her successful theft of public employee pensions.

The article on the front page of the business section is so contradictory.

First it claims that Raimondo’s pension theft is a model for others facing pension debt, like our Mayor Rahm.

Her experience, Mr. DiSalvo and others say, could be a case study for other states and municipalities struggling with pensions and other long-term obligations that cost much more than expected. And the timing could hardly be more critical, given predictions that the fiscal health of state and local governments is likely to remain under stress for years as the population ages.

However, the same article later points out the fundamental difference between Rhode Island and Illinois.

And it isn’t in the level of political corruption between Rhode Island and Illinois. That may be a distinction without a difference.

Unlike Rhode Island, Illinois did make public pensions contractual. Its constitution bars cities like Chicago from imposing pension cuts on their workers.

Yes, indeed.

One thing the two states do share is a willingness of the leaders of their unions to concede what retirees have earned.

A settlement finally emerged this year, which, among other things, gave one-time payments to current retirees, to soften the blow of losing their cost-of-living adjustments. Judge Taft-Carter held a “fairness hearing,” giving those affected a chance to sound off. Many expressed anger. But one union leader, Robert Walsh of the National Education Association of Rhode Island, said that after much soul-searching he had decided to support the settlement as the best deal for his 7,500 members.

A settlement, he said, “can be fair and heartbreaking at the same time.”

Fair? To who?

For more about Gina Raimondo and Rhode Island see David Sirota.