The past theft of pension assets in Illinois was quite easy for some governors and legislators, even for other rogues who bargained for money-enhancing incentives (spiking) for retiring public employees at the expense of the many they would leave behind without their exorbitant financial perks to retire early. We know who the indifferent scoundrels are today and about their schemes to steal even more monies from the public pension funds. These are the same types of perpetrators that advocate a radical “pension reform” bill without reading it or understanding its consequences. That was then.
Now, once again, we have the Civic Federation claiming to do “non-partisan research.” They are a very good example of why we must guard against the so-called “expert” testimonies and negotiating that will be used to influence the Illinois legislators’ decision this spring regarding radical “pension reform,” arguments based upon omissions or adjustments to make the pension systems appear “indisputably” in need of urgent “reform.” We must guard against the disingenuous claims embodied in their demand for radical “pension reform.”
Beware of our legislators’ mantras: “Retirees are living longer now; current teachers’ salaries are increasing; the state’s costs are too high; Illinois has to reduce its expenses to remain economically competitive; we will have to cut services to schools and health care for the elderly; we have to make some hard decisions; we cannot reduce the liability without reducing benefits; the pension systems are unsustainable; health care costs are skyrocketing; it’s about shared sacrifice; we have to do something!”
We should know by now how statistics used for pension liabilities are based upon changing assumptions that include interest and mortality rates, asset returns, estimates of what the state will have to pay in the future, preferential accounting rules and undisclosed influences on legislative decisions. Most of us are aware how certain elements from media, especially Illinois Is Broke (the website of the Civic Committee of the Commercial Club of Chicago), Fox News, and the Chicago Tribune attempt to garner consensus from the wealthy business community. Media succeed quite easily in propagating distorted information and scaremongering schemes to a mostly oblivious public through deceptive practices that distract the populace from carefully examining more sensible, legal and ethical solutions to the state's revenue problems and pension unfunded liability.
We should realize that there is a real incentive for some executives from the Civic Committee of the Commercial Club of Chicago, the Civic Federation, the Illinois Policy Institute and others like them to aggressively attack public employees’ pensions and the public pension systems while promulgating their fallacious suppositions. We know about the types of criminals who can orchestrate the collapse of defined-benefit pension systems in the private sector.
There are hundreds of examples in the private sector. Consider Victor Rice’s blustering “with cognac and cigars” after he accomplished his “organized liquidation” of the retirees’ pension for Varity Corporation, (Rice later collected $50 million in severance after he sold the company in 1999). Consider chief executive Patricia Russo’s slow and deliberate destruction of the employees’ pension and benefits in 2005 at Lucent while using what remained of the pension savings to pay executives’ million-dollar bonuses “because that’s what it’s going to take to continue to attract and retain the talent required to build this company back to where we want it to go” (Ellen E. Schultz, Retirement Heist, 2011). Examples of Machiavellian bravado are not exceptions in today’s plutocratic worldview.
It is our duty to fight against any diminishment of the public employees’ benefits and any sort of financial restructuring thereof before it is written into law this spring. Consider defined-contribution savings plans will obviously create no liabilities for the state but generate enormous profits for the financial sector (of which the majority of the Civic Committee are members). These savings plans are spawns of the defunct defined-benefit plans from the private sector.
ask whether the Civic Committee and Sidley Austin’s past preemptive assaults
and semantic word-game manipulations were meant to test a possible reduction of
benefits in the public pensions without violating Article XIII, Section 5 of
the Illinois Constitution. We might even ask: does anyone believe
that members of the Civic Committee (and many legislators of the 97th General
Assembly) care about whether a public employee has any retirement plan at
Who has the most to gain by radical “pension reform”? Might they be the executives of the Civic Federation, the Civic Committee, and certain legislators who wish to align the public pension systems with the financial industry to manufacture even more profits for themselves? The philosophy of these robber barons includes the dictum that cutting pension benefits will produce gains for employers. What they never mention is that the State of Illinois is responsible for the unfunded liability no matter what so-called “pension reform” is attempted and found unconstitutional.