Saturday, September 16, 2017

Good-Bye Princess of Madiganistan



It was not too long ago Lisa Madigan declared a financial emergency and attacked the state’s public employees and retirees. Madigan and other self-interested politicians insisted on cutting pensions as their solution for the state’s budget problems, instead of considering more comprehensive, legal and ethical strategies for addressing the state’s antiquated revenue system and unfunded liabilities the Illinois General Assembly had created.

Of course, there was never a threat to the “public’s safety, health, and morals as well as peace, well-being and order of the state”; nor was the State of Illinois dealing with an economic emergency of such magnitude that the state’s politicians were compelled to invoke such powers “to protect the state's citizens and serve a reasonable public purpose or need.” 

What Madigan and the Illinois General Assembly attempted to do, nevertheless, was violate the state’s pension and contract clauses, due process and equal protection rights, the right of eminent domain, and also provisions in the U.S. Constitution, such as the taking of property without due process of law and equal protection, and ex post facto law.

What Madigan and the Illinois General Assembly learned on May 8, 2015 was what many of us knew: the state's chronic underfunding of its public pension systems for decades cannot warrant the impairment or diminishment of public employees' pension benefits and rights, and Madigan and the Illinois General Assembly could not diminish a constitutionally-protected pension because the “Pension Protection Clause protects pension benefit rights in all pension plans as enforceable contractual rights when a public employee becomes a member of a pension system, and it bars the legislature from later unilaterally reducing those rights.” 


The Reasons Not to be Afraid that the Public Pensions Systems Will Default


A Continuation of Yesterday's Post Regarding Illinois Representative Scott Drury’s "Fear-Based" Pension Buyout Plan and Ignorance of the Rule of Law:

“…The [Pension Protection] Clause [Article XIII, Section 5 of the Illinois Constitution] stands as a constitutional guarantee that pension recipients will receive their pension payments when due even if a pension fund [such as the Teachers’ Retirement System of Illinois] defaults or is on the verge of default.

“Any state pension participant placed in such a position would have a cause of action in circuit court to enforce this guarantee and obtain payment directly from the State’s General Fund. A participant need not pursue payment before the Illinois Court of Claims and depend upon the largesse of the General Assembly…

“Obligations of State: the payment of the required department contributions, all allowances, annuities, benefits granted under this Article, and all expenses of administration of the system are obligations of the State of Illinois to the extent specified in this Article’ (40 ILCS 5/14-132). The Clause makes the State a Guarantor based on its plain meaning, convention history, Illinois court decisions, and common law understanding of pension payments as creating a debtor relationship…

“The Pension Code sufficiently manifests intent to make pension payments the obligations of the State when due… [T]he Illinois Pension Code Article of each of the five state-funded pension systems contains a provision with sufficient language binding the State to pay pensions even if a system defaults.

“Each provision states in pertinent part that ‘[t]he payment of the required department contributions, all allowances, annuities, benefits granted under this Article, and all expenses of administration of the system are obligations of the State of Illinois to the extent specified…’ (40 ILCS 5/2-125; 40 ILCS 5/14-170; 40 ILCS 5/15-156; 40 ILCS 5/16-158; 40 ILCS 18-132).

“A pension recipient would most likely obtain relief in circuit court through a mandamus action against the State Comptroller… [This writ is used when all other judicial remedies have failed or are inadequate]…  

“Again, while the Illinois Supreme Court has held that the Pension Clause does not provide pension participants with a constitutional right to a specific funding percentage (See supra notes 295, 311, 328 and accompanying text. People ex rel. Illinois Federation of Teachers v. Lindberg, 60 Ill. 2d 266, 272, 326 N.E.2d 749, 752 (1975)), it undoubtedly guarantees them the right to receive the money due them at the time of retirement (Lindberg, 60 Ill. 2d. at 271, 326 N.E.2d at 751-52 (stating that the Clause provides the contractual right to ‘receive money due them at the time of their retirement’); McNamee v. State, 173 Ill. 2d 433, 446, 672 N.E.2d 1159, 1166 (1996). (‘[The Pension Protection Clause] creates an enforceable contractual relationship that protects only the right to receive benefits); People ex rel. Sklodowski v. State, 182 Ill. 2d 220, 230-31, 695 N.E.2d 374, 378-79 (1998) (same)).

“In addition, the Supreme Court has recognized… that if a pension fund were ‘on the verge of bankruptcy or imminent bankruptcy’ and ‘benefits [were] in immediate danger of being diminished,’ then pension participants would have a cause of action in circuit court to enforce their right to receive payments (McNamee, 173 Ill. 2d at 446-47, 62 N.E.2d at 1166; Sklodowski, 182 Ill. 2d at 233, 695 N.E.2d at 379.).  

Since the Clause acts as a restriction on legislative power, it is enforceable by the courts. (Client Follow-Up Co. v. Hynes, 75 Ill. 2d 208, 390 N.E.2d 847 (1979) (‘Limitations written into the Constitution are restrictions on legislative power and are enforceable by courts.’). See also People ex rel. Hilger v. Myers, 114 Ill. App. 2d 478, 252 N.E.2d 924 (1st Dist. 1969)...

“This conclusion comports with the drafters’ original intent, (See IV Proceedings 2926 (statements of principal sponsor, Delegate Kinney) (defining the word ‘enforceable’ as ‘meant to provide that the rights established shall be subject to judicial proceedings and can be enforced through court action’; and defining the word ‘impaired’ as ‘meant to imply and to intend that if a pension fund would be on the verge of default or imminent bankruptcy, a group action could be taken to show that these rights should be preserved’); id. (Statements of cosponsor, Delegate Kemp) (stating he understood the Clause as making ‘certain that irrespective of the financial condition of a municipality or even the state government that those persons who have worked for often substandard wages over a long period of time could at least expect to live in some kind of dignity during their golden years’) (emphasis added) and the voters’ understanding that pension recipients would receive their full benefits… (See supra notes 196-202 and accompanying text (discussing the Convention’s official explanation and newspaper articles).

“In sum, if the Illinois Supreme Court were confronted with a circumstance where a pension fund was on the verge of default and pension payments were diminished, then the court would most likely permit a mandamus action to proceed and resolve that action in the same manner as Jorgenson v. Blagojevich [2004] (211 Ill. 2d 286, 811 N.E.2d 652 (2004). See People ex rel. Sklodowski v. Illinois Retired Teachers Association, 284 Ill. App. 3d 809, 817-18, 674 N.E.2d 81, 86-87 (1st Dist. 1996)…

“In that case, the court held that where a constitutional or statutory provision ‘categorically commands the performance of an act, so much money as is necessary to obey the command may be disbursed without any explicit appropriation.’ (211 Ill. 2d at 314, 811 N.E.2d at 668-69 (quoting Antle v. Tuchbreiter, 414 Ill. 571, 581, 111 N.E.2d 836 (1953)). The court applied this principal to compel the State Comptroller to pay judges from the State Treasury, without an appropriation, the cost of living increase that was part of their constitutionally-protected salaries under Article VI, Section 14 of the Illinois Constitution (Id.).

“As noted, that provision bars the diminishment of judicial salaries just as the Clause prohibits the diminishment of pension benefit rights. Accordingly, the Supreme Court would most likely grant pension participants the same relief provided in Jorgenson by compelling the Comptroller to pay the needed funds from the State General Revenue Fund, especially since the State Pension Funds Continuing Appropriation Act requires automatic appropriations be made from the Fund to the five State pension systems. (40 ILCS 15/1 (2008); 40 ILCS 15/1.1 (2008); 40 ILCS 15/1.2 (2008).)…” (IS WELCHING ON PUBLIC PENSION PROMISES AN OPTION FOR ILLINOIS?
AN ANALYSIS OF ARTICLE XIII, SECTION 5 OF THE ILLINOIS CONSTITUTION by Eric M. Madiar, former Chief Legal Counsel to Illinois Senate President John J. Cullerton and Parliamentarian of the Illinois Senate, (pages 65-70). (What happens if the Illinois public pension funds are “on the verge of bankruptcy?” 

P.S.

“Pensions will not run out of money… [That] assumes that at a future date, state pensions will just cease and all outstanding financial obligations will come due… Unlike a corporation, a state government cannot go out of business… [Accordingly,] state law empowers TRS (40 ILCS 5/16-158c)… Payment of the required state contributions and of all pensions, retirement annuities, death benefits…, all other benefits…, and all expenses are obligations of the state… The state has waved its sovereign immunity in regard to the teachers’ pension because TRS is a qualified pension plan under the tax-deferred provisions of the IRS code.  Federal law would protect all claims… [Furthermore], pensions [are not] the problem [or] why Illinois has been unable to pay its bills.  The reason is the dramatic fall-off in state revenues over the years, costing the state billions” (Dave Urbanek, Public Information Officer at TRS, 2011) (What We Believe We Know about the SUSTAINABILITY of the TRS PENSION).

Why Is a Pension Buyout a Terrible Choice to Make in Illinois (from Yesterday's Post): Because It Is an Unnecessary Reduction to Your Defined Benefit Pension Plan.

Friday, September 15, 2017

“Any buyout whether it be full or partial, at retirement or before, rolled over into an IRA or used to purchase an annuity is a reduction in the guaranteed benefit that the member may have earned up to the point of the buyout”—TRS Executive Director Dick Ingram



“State Rep Scott Drury's pension plan is to offer current retirees a buy-out for 70 cents on the dollar. He says he would expect 25 to 30% of current retired teachers would take the deal. I said why would someone take a deal that would give them less money unless they were afraid that the system would go under? He agreed. I told him that to come up with a policy based on fear that takes money from the elderly and retirees to save the state money was immoral. And that he was immoral. Or maybe I said amoral. He shook my hand and told me that we agreed to disagree. I hate it when someone says that to me”—Fred Klonsky.


TRS Executive Director Dick Ingram told legislators in March 2016 that a “buyout” is a benefit cut that would “do little or nothing” to improve the financial health of TRS: 

“…[I]t must be stated that any buyout – whether it be full or partial, at retirement or before, rolled over into an IRA or used to purchase an annuity – is a reduction in the guaranteed benefit that the member may have earned up to the point of the buyout. You won’t see any significant relief for the unfunded burden we already have created. In fact, the buyouts may actually serve to accelerate the state’s pension obligations…


BUYOUTS ARE A BENEFIT CUT: 

“While the proposals may have a certain appeal to some, and potentially positive perceived benefits, we should study carefully as to whether we might expect any significant benefit from them. [One] can see few instances where prudent financial considerations would lead a member to take a reduction in a benefit that has been guaranteed by the Illinois Constitution and reaffirmed by the Supreme Court. Such instances would be rare and likely due to unusual personal circumstances. They will likely often reflect what is termed adverse selection. 

“An example would be a member who has a terminal illness and who can determine that the lump sum will provide a bigger payout than the monthly benefit. Further, accepting a buyout would place the members' assets subject to the well documented reality that individuals personally managing their retirement money in an IRA or defined contribution account do so with lower average annual investment returns and higher costs than when their assets are managed professionally in a pooled defined benefit plan that shares risks and rewards.

“Some have pointed out that an individual account can be willed to your heirs when you die. That is true but when that happens it means you have... died early… Note that the survivor benefit available to a member of TRS allows them to provide for their beneficiary after they die. While not exactly analogous to the passing on of an asset like the remaining balance of an IRA, it is a significant value when a member is planning for the financial security of their loved ones after they die.

“Others have stated that having control over their assets after a buyout would provide a member some financial flexibility. True again, but this is flexibility that many if not most of our members would likely not need. It would also subject the funds to the risk of being diverted to some non-retirement use. Their TRS benefit is the core element of their retirement security. They are teachers who have planned their retirement relying on a defined benefit that is designed to replace roughly 75 percent of their full-career, pre-retirement earnings. This is exactly what most financial planners suggest is prudent.

“While they may supplement their defined benefit with personal savings in some manner, they have not earned any Social Security benefits that provide a retirement safety net for most of their friends and neighbors. They need the security of a regular monthly check that their TRS defined benefit delivers…” 
(TESTIMONY OF TRS EXECUTIVE DIRECTOR DICK INGRAM TO THE HOUSE PERSONNEL AND PENSIONS COMMITTEE SPRINGFIELD, IL: BUYOUTS ARE A BENEFIT CUT; [IT'S] A MATTER OF TRUST... (MARCH 10, 2016).


Tomorrow's post will address this issue: Can the TRS system "go under?"


Saturday, September 9, 2017

Re: Equifax Breach



Place a Fraud Alert (from the Federal Trade Commission):

Ask 1 of the 3 credit reporting companies to put a fraud alert on your credit report. They must tell the other 2 companies. An initial fraud alert can make it harder for an identity thief to open more accounts in your name. The alert lasts 90 days but you can renew it.


Why Place an Initial Fraud Alert:

Three national credit reporting companies keep records of your credit history. If someone has misused your personal or financial information, call 1 of the companies and ask for an initial fraud alert on your credit report. A fraud alert is free. You must provide proof of your identity. The company you call must tell the other companies about your alert.

An initial fraud alert can make it harder for an identity thief to open more accounts in your name. When you have an alert on your report, a business must verify your identity before it issues credit, so it may try to contact you. The initial alert stays on your report for at least 90 days. You can renew it after 90 days. 
It allows you to order one free copy of your credit report from each of the three credit reporting companies. Be sure the credit reporting companies have your current contact information so they can get in touch with you.
How to Place an Initial Fraud Alert:
1        Contact one credit reporting company

1.       Report that you are an identity theft victim.
2.      Ask the company to put a fraud alert on your credit file.
3.      Confirm that the company you call will contact the other 2 companies.

Placing a fraud alert is free. The initial fraud alert stays on your credit report for 90 days.

Be sure the credit reporting companies have your current contact information so they can get in touch with you.
2.     Update your files:

The credit reporting company will explain that you can get a free credit report, and other rights you have.

3.     Mark your calendar:

The initial fraud alert stays on your report for 90 days. You can renew it after 90 days.

4.     Update your files:
1.       Record the dates you made calls or sent letters.
2.      Keep copies of letters in your files.

TransUnion
1-800-680-7289
Experian
1-888-397-3742
Equifax
1-888-766-0008


·         Credit Freeze FAQs
·         Identity Theft
·         Free Credit Reports


The Federal Trade Commission (FTC) is the nation’s consumer protection agency. The FTC works to prevent fraudulent, deceptive and unfair business practices in the marketplace.

·         Privacy Policy
·         About Us



Thursday, September 7, 2017

Please Send a Letter to Your Senator (from the Alzheimer's Association National Office in Chicago)



Just a short time ago the U.S. Senate Appropriations Committee approved an additional $414 million increase in Alzheimer’s and dementia research funding. We are very thankful for the bipartisan support of the Committee, in particular legislative champions Senator Roy Blunt (R-MO) and Senator Patty Murray (D-WA). However, this funding increase is far from guaranteed. It must still be approved by the full Congress and signed into law by the President.

Very soon the entire Senate will have an opportunity to advance this measure.

Please send a message to Sen. Durbin and Sen. Duckworth and urge them to support this funding increase.

If signed into law, federal investment in Alzheimer’s and related dementia research funding would reach $1.8 billion. Leading experts have said a greater investment is still needed if we are to stay on the path toward preventing and effectively treating Alzheimer’s by 2025.

Please urge your Senator to support vital Alzheimer’s research that will save lives and millions of dollars.

Alzheimer's Association National Office
225 N. Michigan Ave., Fl. 17, Chicago, IL 60601
© 2017 Alzheimer's Association. All rights reserved.
800.272.3900 | alz.org®



Wednesday, September 6, 2017

"Keep the Kids; Deport the Racists"



“In an act of cowardice, where he refused to take any questions, Attorney General Jeff Sessions announced the Trump administration’s termination of DACA, the program that allows immigrants who came to the United States as children to remain in their homes.

“Sessions has long been a staunch supporter of anti-immigrant policies, and he could hardly hide his delight in announcing this dreadful policy reversal — a reversal that could affect 800,000 immigrants and cost the United States $460 billion. This, according to Sessions, is the ‘compassionate thing to do.’

“During his remarks, Sessions also spewed a number of repeatedly debunked lies about the supposed drain on American resources caused by immigrant children and that their very presence in the United States somehow increases crime rates. Those claims are blatantly false and are nothing more than a perpetuation of ugly racist stereotypes that have no basis in fact. The vast majority of so-called DREAMers are employed (or in school) and are contributing to the economy and to the country.

“In fact, DREAMers have lost their lives helping others in Houston in the aftermath of Hurricane Harvey. Jesus Contreras was brought to the United States from Mexico when he was 6 years old. He has been serving his community as a paramedic in Houston. Alonso Guillen, a DACA recipient, drowned in the flooding in Houston while working on a boat to rescue others. These are the people Sessions and Trump think do not belong in this country.

“Sessions also had the audacity to claim that kicking people out of the only home they ever known represents the Trump administration’s dedication to the ‘rule of law.’ It’s an absurd and not credible to say only weeks after Donald Trump pardoned the criminally racist former Sheriff Joe Arpaio, who flagrantly disobeyed a court order and was convicted of criminal contempt.

“Trump cared nothing about the rule of law when he issued that pardon and other actions by him and his inner circle to circumvent the law — on everything from him using his presidency to personally profit, to his potential obstruction of justice by trying to shut down the investigation into his campaign’s collusion with Russia — have made a disgraceful mockery of the rule of law and the Constitution.

“Trump did not even have the courage to make the announcement himself. While he callously teased the expected announcement on Twitter, he left Sessions to do the dirty work of making the announcement. Trump, in fact, will not be facing any questions about this unthinkably cruel policy. Trump has not held a solo press conference in more than 200 days because he is afraid to be held accountable by the media for his actions.

“Make no mistake: the decision to punish children for whom America is their home will have far-reaching and negative effects for the United States...”





Tuesday, September 5, 2017

Hurricane Irma



“As the northern Caribbean islands brace for impact and evacuations are ordered in south Florida, Hurricane Irma became one of the strongest Atlantic hurricanes ever recorded on Tuesday afternoon with sustained winds of over 185 mph and an intensity that was ‘redefining the rules’ of what a storm in this part of the world could be.

"’Wow,’ tweeted meteorologist Eric Holthaus, ‘Hurricane #Irma is now expected to *exceed* the theoretical maximum intensity for a storm in its environment. Redefining the rules.’






“The National Hurricane Center, in an afternoon advisory, warned that Irma was a ‘potentially catastrophic category 5 hurricane’ that would bring ‘life-threatening wind, storm surge, and rainfall hazards’ to the Leeward Islands beginning on Tuesday night, with Puerto Rico, the Virgin Islands, Cuba, the Bahamas, Turks and Caicos, the Dominic Republic, and Haiti also in danger in the days ahead.  The Florida Keys and southern coastal areas of the mainland, including Miami, could face a direct hit this weekend.

“According to a mid-afternoon update from the Weather Underground's Jeff Master:

Hurricane Irma intensified into an extremely dangerous high-end Category 5 storm with top sustained winds of 180 mph on Tuesday morning, putting it among the strongest Atlantic hurricanes ever observed. Irma's winds are the most powerful ever measured in an Atlantic hurricane north of the Caribbean and east of the Gulf of Mexico. Measurements from Hurricane Hunter aircraft found peak winds of close to 180 mph, well above the 157-mph threshold for Category 5 strength. At 11:07 am EDT, a dropsonde in Irma's eye measured a central pressure of 927 millibars, 4 mb lower than the previous pass, so Irma is still strengthening.

“Irma is poised to deliver a punishing blow to the northern Lesser Antilles Islands on Tuesday night and Wednesday. As of 11 am EDT Tuesday, Hurricane Warnings were in effect for the northern Leeward Islands, the U.S. and British Virgin Islands, and Puerto Rico. Tropical storm-force winds are expected to spread into the Lesser Antilles on Tuesday night, reaching the Virgin Islands on Wednesday morning, Puerto Rico on Wednesday afternoon, and the Dominican Republic on Thursday morning (Figure 2). As of 8 am EDT, most of southern Florida, Cuba, and The Bahamas were in the 5-day cone of uncertainty for Irma.

“Subsequent to Master's analysis, the storm did continue to intensify with its pressure continuing to drop and predictions that sustained winds could reach a jaw-dropping 200 mph...” (As Irma Intensifies “You’ve Never Experienced a Hurricane Like This” by John Queally).