The Illinois House and Senate each backed its own leader’s bill; the Senate voted down Madigan’s proposal, and House Speaker Madigan then adjourned the House without calling Cullerton’s plan for a vote. In a recent Illinois Times article by reporter Patrick Yeagle, he stated: “Practically everyone knows that Illinois’ public pension systems are only about 45% funded, but not everyone knows that 45% is actually an improvement over the 40% funding of the past. The historical record of Illinois’ 1970 Constitutional Convention shows the state’s unfunded pension liability wasn’t considered a crisis when delegates included a clause to protect pension rights”, stating “public pensions are contractual rights that cannot be “diminished or impaired”. The Illinois General Assembly has failed to make the required pension contributions for the past five or six decades. “It’s absolutely a manufactured crisis”, says Ann Lousin, who participated in the convention. Illinois lawmakers now want to welch on those hard-earned retiree “rights”. Professor Lousin says that “unfunded liability is an unrealistic measure of a pension fund’s health because it assumes that every employee could retire at the same time”, which of course wouldn’t happen. “An unfunded pension liability measures how much money the state needs to collect in order to pay all current and future pensions”. “Other states fund their pension systems at around 70 to 100%, making Illinois look bad by comparison in the eyes of credit rating agencies”, says Yeagle. “For fiscal year 2014, Illinois must pay $6.8 billion total into the five public pension systems because of a state law enacted in the mid 1990’s. If followed, the law purports to fund the state pension system at 90% by 2045”. “Currently, Illinois’ five pension systems can pay out benefits to existing retirees. The TRS (teacher’s retirement system) is the largest public pension system in Illinois, and despite carrying an unfunded liability since 1953 –TRS has always paid its retirees on time, and the executive director, Richard Ingram, stated “the truth is TRS will have enough money on hand to pay pensions well into the future”. The convention debate of 1970 was fueled by the fear caused “when many businesses began reneging on pension promises made to workers in the private sector”. Home rule powers were “newly included in the 1970 constitution allowing local governments to levy taxes, issue bonds, pass regulations and more”. “As a result of the General Assembly’s inconsistent pension contributions and public perception that unfunded pension liability is a crisis, lawmakers are now searching for ways to cut future contribution costs”. As a recent state retiree myself, with 25 years of service, I expect the state to keep to the contracts agreed upon. I worked all those years anticipating that I would have a decent retirement benefit with my health insurance premiums paid, not having to pay out half of my monthly pension to pay for my monthly insurance premium! Right is right! Can we expect no one to keep their word?
Jun 8 2013
Why IL legislature ended session without a measure to address pension problem
The Illinois House and Senate each backed its own leader’s bill; the Senate voted down Madigan’s proposal, and House Speaker Madigan then adjourned the House without calling Cullerton’s plan for a vote. In a recent Illinois Times article by reporter Patrick Yeagle, he stated: “Practically everyone knows that Illinois’ public pension systems are only about 45% funded, but not everyone knows that 45% is actually an improvement over the 40% funding of the past. The historical record of Illinois’ 1970 Constitutional Convention shows the state’s unfunded pension liability wasn’t considered a crisis when delegates included a clause to protect pension rights”, stating “public pensions are contractual rights that cannot be “diminished or impaired”. The Illinois General Assembly has failed to make the required pension contributions for the past five or six decades. “It’s absolutely a manufactured crisis”, says Ann Lousin, who participated in the convention. Illinois lawmakers now want to welch on those hard-earned retiree “rights”. Professor Lousin says that “unfunded liability is an unrealistic measure of a pension fund’s health because it assumes that every employee could retire at the same time”, which of course wouldn’t happen. “An unfunded pension liability measures how much money the state needs to collect in order to pay all current and future pensions”. “Other states fund their pension systems at around 70 to 100%, making Illinois look bad by comparison in the eyes of credit rating agencies”, says Yeagle. “For fiscal year 2014, Illinois must pay $6.8 billion total into the five public pension systems because of a state law enacted in the mid 1990’s. If followed, the law purports to fund the state pension system at 90% by 2045”. “Currently, Illinois’ five pension systems can pay out benefits to existing retirees. The TRS (teacher’s retirement system) is the largest public pension system in Illinois, and despite carrying an unfunded liability since 1953 –TRS has always paid its retirees on time, and the executive director, Richard Ingram, stated “the truth is TRS will have enough money on hand to pay pensions well into the future”. The convention debate of 1970 was fueled by the fear caused “when many businesses began reneging on pension promises made to workers in the private sector”. Home rule powers were “newly included in the 1970 constitution allowing local governments to levy taxes, issue bonds, pass regulations and more”. “As a result of the General Assembly’s inconsistent pension contributions and public perception that unfunded pension liability is a crisis, lawmakers are now searching for ways to cut future contribution costs”. As a recent state retiree myself, with 25 years of service, I expect the state to keep to the contracts agreed upon. I worked all those years anticipating that I would have a decent retirement benefit with my health insurance premiums paid, not having to pay out half of my monthly pension to pay for my monthly insurance premium! Right is right! Can we expect no one to keep their word?
By spiritspeak • Community Roundtable 0