Bill Knight – December 27
1:00 am
Thu December 27, 2012

A Review of an Illinois Pension Reform Bill

Illinois’ pension-reform issue seemed to make some progress this month, but labor and legislators still question the latest, bipartisan proposal addressing the state’s $95 billion pension problem, and as of press time the state’s We Are One coalition still plans a rally at the Illinois Statehouse on Thursday and Friday, Jan. 3-4.

Bill Knight
Bill Knight

Eighteen lawmakers appeared with HB 6258 Democratic co-sponsors Elaine Nekritz of Des Plaines and Daniel Biss of Skokie at the measure’s introduction Dec. 5.

Republicans David Harris and Chris Nybo also joined the press-conference presentation, which outlined its effects. For state workers in the current state pension systems, the bill would:

*cut cost-of-living adjustments to apply only to the first $25,000 of the employees’ pension, or the first $20,000 for employees eligible for Social Security;

*have COLAs take effect when employees turn 67 or five years after they retire, whichever is first;

*increase retirement age by adding five years for employees age 34 and younger, three years for employees age 35 to 39, and one year for employees age 40 to 45; it apparently wouldn’t affect employees age 46 and older;

*require workers to contribute more toward their pensions by 1% for the first fiscal year the legislation is in effect and 2% for each year thereafter;

*limit pensionable salary (the amount of salary that counts toward a pension) to the higher of the Social Security wage base or the participant’s salary when the legislation takes effect; and

*eliminate the mandated choice between COLA and access to health insurance.  

The We Are One coalition issued a statement saying, “We appreciate lawmakers’ latest attempt to move the pension conversation forward. As we have consistently stated, the We Are One Illinois coalition stands ready to work collaboratively toward a solution.

“We were not consulted in the development of this plan, but our preliminary review suggests that there are significant problems with HB 6258 that need to be worked through,” the group continued “The pension debt was caused by the state’s failure to make actuarially adequate pension contributions, not by public employees, but like its predecessors, this proposal essentially balances the pension debt on the backs of teachers, police officers, nurses, caregivers, and other public servants, both active and retired. It is also unclear at this juncture whether this proposal is constitutionally or actuarially sound.”

Likewise, House Minority Leader Tom Cross, an Oswego Republican, told the Chicago Sun-Times he was wary, saying, “The cost shift is problematic. I don’t want to be critical of this, but I do think there are a few constitutional issues here.”

For her part, Nekritz said she believes the “plan . . . will survive a legal challenge because it contains a guarantee the state will make its obligated pension payments in the future. The major reason for the current pension debt is the state’s failure to make payments into the system.”

Illinois AFL-CIO president Michael Carrigan has said, “Our unions are firmly committed to negotiating a solution to the pension funding crisis. However, to go forward, we need both the data supporting any proposals and a commitment that the representatives with whom we engage are authorized to speak for the governor and the legislative leaders.”

Unions that have participated in We Are One actions include the Illinois AFL-CIO, the Illinois Education Association, Illinois Federation of Teachers, Associated Fire Fighters of Illinois, American Federation of State, County & Municipal Employees Council 31, the Fraternal Order of Police, Service Employees International Union, Laborers International Union of North America Midwest Region, Illinois Public Pension Fund Association, National Pension Coalition, United Transportation Union, Illinois Nurses Association and Teamsters Local Union #700.  

The tentative schedule for the Jan. 3-4 action –

9:30-11: Buses from throughout the state arrive in Springfield

10 a.m.-noon: Legislative office appointments (Unions encourage participants to make appointments in advance)

12-1 p.m.: Rally in the Capitol rotunda (Organizers note if the Statehouse reaches maximum capacity, state police may restrict admission, but such a crowd “sends the right message to lawmakers.”)

1-4 p.m.: One-on-one lobbying opportunities  

The opinions expressed are not necessarily those of Tri States Public Radio or Western Illinois University. Bill Knight’s newspaper columns are archived at billknightcolumn.blogspot.com