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Gasp! IL Dems agree with ALEC on pension reform

By   /   August 13, 2013  /   3 Comments

By Benjamin Yount | Illinois Watchdog

SPRINGFIELD  —  Quick, who said Illinois should pay down its worst in the nation, $130 billion pension debt?

STRANGE BEDFELLOWS: The new ALEC report is similar to what Quinn wants for pension reform.

Who noted that Illinois needs to secure a stable pension system for the future? And who added that Illinois needs to keep it promises to current and retired public employees?

Gov. Pat Quinn, and of course, the American Legislative Exchange Council, better known as ALEC.

Yes, the same group being label a conservative shill organization, released a new report that sounds very similar to Illinois’ populist, but not popular, Democratic governor.

The ALEC report, titled “Keeping the Promise”, lays out six broad goals:

  • Pension reform should remove the risk that states will go functionally bankrupt due to pension obligations
  • Pension reform should make sure that commitments and obligations to current workers are fulfilled
  • Pension plans should be predictable and defined
  • The public (taxpayers) should not bear all the risk of pension plans
  • No pension plan should be exempt from scrutiny
  • Retirement plans should not lock employees into the public sector

That sounds very similar to the broad goals from  Quinn’s office.

“The governor’s proposal has been, and continues to be, we need a comprehensive solution,” Quinn Chief of Staff Jerry Stermer told the Legislature’s special pension committee last month. “(A solution) that stabilizes the systems, enables the systems to actually pay the pensions … to erase the unfunded liability, to get to 100 percent funding, and to end the squeeze.”


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The squeeze, as embodied by Quinn’s cartoon python, is the dwindling amount of money being spent on education and human services as more and more is spent on pensions.

A FRIEND OF ALEC?: Gov. Pat Quinn's pension reform suggestions are very similar to those put forth by the American Legislative Exchange Council.

A FRIEND OF ALEC?: Gov. Pat Quinn’s pension reform suggestions are very similar to those put forth by the American Legislative Exchange Council.

The ALEC report, written by former Republican Utah state Sen. Dan Liljenquist, does say that beyond the broad goals for pension reform, each state may look at other solutions.

“There is ample evidence to suggest that legislators should move from defined-benefit systems to properly designed alternatives, such as defined-contribution, cash-balance, or hybrid plans,” the report states.

Moving away from a defined benefit plan is not part of Quinn’s pension reform ideas. But a hybrid plan is a piece of the puzzle being discussed by lawmakers tasked with creating a pension reform plan.

State Rep. Elaine Nekrtiz, D-Northbrook, who is helping to guide the Legislature’s special pension committee, said she was shocked how similar the ALEC report is to her ideas.

“At first I thought, ‘Is this really from ALEC?’,” Nekritz said. “But a lot of the ideas mentioned in the (ALEC) report are failry standard pension reform doctrine.”

“I think (the similarities) say more about the broad base of ALEC,” state Sen. Matt Murphy, the GOP’s second in command on the pension committee said.

But Murphy is quick to say that just because ALEC is on the same page as Illinois’ Democratic leaders on pension reform, does not mean the group is going to be embraced by those on the left.

“While there may be agreement here and there, the liberals and Democrats will continue to take issue with ALEC,” Murphy added.

Murphy and Nekritz said Illinois is “closer than ever before” to an agreement on pension reform. But they also said Illinois is “not quite there yet.”

Contact Benjamin Yount at Ben@IllinoisWatchdog.org and find him on Twitter @BenYount.

 

 

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  • AlgernonMoncrief

    KWAME RAOUL: FAILING TO PAY CONTRACTED COMPENSATION
    IS UNCONSTITUTIONAL. FYI KWAME, PUBLIC PENSION COLA BENEFITS ARE ALSO CONTRACTED (DEFERRED) COMPENSATION FOR WORK
    COMPLETED.

    Kwame Raoul is an engaging public figure, but he needs to get it right on public pension rights in Illinois.

    Kwame thinks that it is unconstitutional for the state to withhold state legislator’s earned compensation. So, why does Kwame think that it is constitutionally
    permissible for the state to withhold the earned, deferred compensation of
    retired public sector workers by perhaps seizing their contracted pension COLA
    benefits?

    Illinois Pension Conference Committee Chair Kwame Raoul on state legislator’s contractual rights to earned compensation:

    “I think … there are just plain old labor law issues, employment law issues, because we’re employed, in essence, by contract. And it’s an assigned salary,
    so if you don’t pay somebody, you’re obviously in violation of the law, you know?”

    Kwame Raoul on Illinois public pension retiree COLA benefits:

    “It’s identical in that aspect (the plan’s primary component is changing a 3 percent compounded cost-of-living increase to a percent equal to half of the inflation rate).”

    “One of the attractive aspects is the notion of inflation protection for the employees and retirees. And that’s attractive both from just a moral standpoint and from making an argument of constitutionality in terms of having something offered.”

    (My comment: Kwame, breaking a contractual public pension COLA obligation is not at all “attractive,” nor is it “constitutional.” Taking something from a person is not giving something to a person. Illinois pensions have “automatic,” contracted COLA benefits. Public pension COLA benefits are deferred
    compensation, presently earned.)

    http://www.chicagolawbulletin.com/Articles/2013/07/30/dispatch-7-30-2013.aspx

    Support contractual public pension rights in the USA. Contribute at
    saaveperacola.com. Friend Save Pera Cola on Facebook!

  • Tough Love

    The 1-st and 3-rd bullets:

    “Pension reform should make sure that commitments and obligations to current workers are fulfilled” and “The public (taxpayers) should not bear all the risk of pension plans”

    Cannot BOTH be achieved … we (the Plans, the Taxpayers, etc.) do not have the funds now, or reasonably expect to EVER have the funds to fully pay the (VERY excessive compared to what COMPARABLE Private Sector workers typically get) promised pensions, and who OTHER THAN taxpayers is there to look to ?

    Sorry, but extreme GREED (and incompetence, self-interest,and stupidity) HAS consequences.

  • Kim J

    First, anyone in the pension systems pay INTO the pension systems, up to 9% of their paycheck(depends on what agency you work–corrections, state police, forensic mental health pay more). This means that workers already do pay into the funds. It was the state that didn’t pay their share…beginning with Thompson(who used the pension payment funds for the Illinois First program, among other things done). I also had another 6+% put into Social Security and 2% in Deferred Compensation,(457b, similar to 401K).
    Second–where is the “VERY excessive” pension of a normal worker? The average pension is under $30K(and many state workers only receive a pension, no social security). And why don’t private workers receive a pension? Cuz Reagan talked people into the “401 con” you know, the one where you take your own money and put it away and the nice people on Wall Street will make millions…for themselves and you’re screwed. And during this same time, many corporations started outsourcing and telling you that if you wanted a job, you’d have to get paid less…and you did it. Its time for private workers to join together and demand better working conditions, not just look at me and decide I don’t deserve what I worked for because I put my life in jeapardy for your safety and receive a pension.
    Third, um…state employees, firefighters, teachers, police also PAY INCOME TAX. So we also understand the ramifications of too many income taxes…on the other hand we also understand about the very lucrative tax loopholes for large corporations–think Caterpillar, GE, Sears, Google, Boeing, Motorola, CME, OfficeMax; the true welfare queens of this state.
    We don’t need pension reform, we need tax reform.