The Pension Clause “creates an enforceable contractual relationship that protects only the right to receive benefits. A cause of action would exist if legislation diminished a person’s right to receive benefits or place the pension system on the verge of default or imminent bankruptcy” (39); and People ex. Rel. Sklodowski v. State in 1998: the third vested case issue affirms that an employee acquires a “vested” right when he or she enters the pension system. The court, however, “reaffirmed the holdings of both cases [Lindberg and McNamee] that the Clause does not create a contractual basis for participants to expect a particular level of funding, but only a contractual right that they would receive the money due them at the time of their retirement” (40).
After reviewing Madiar’s 76-page document, it is evident that the “new reality” is also unconstitutional and leaves us with some inquiries. Are Ingram and some of the Teachers’ Retirement System’s trustees, the Illinois General Assembly, and the Civic Committee of the Commercial Club of Chicago proposing that current teachers’ “benefits” can be reduced as a result of this “new reality?” And what would be the questionably-unlawful impact on any current teacher retirees; furthermore, who is authorized to negotiate on behalf of the retired teachers in Illinois?
Moreover, is the fact that Cinda Klickna is both president of IEA and a TRS trustee a conflicting and disadvantageous set of circumstances for herself, as well as for members of both the IEA and TRS? “[It has been said] the primary duties in Illinois law that apply to pension fund trustees are prudence, loyalty, and avoiding conflicts of interests. The prudence and loyalty standards are taken directly from the Federal Employee Retirement Income Security Act statute. These standards establish that trustees must ‘protect the overall actuarial soundness of the fund,’ but do not extend to a protection of particular benefits for members.
"Trustees owe no duty to the legislature, organized labor, the governor, retired teacher associations or contributing employers… While trustees are entitled to fill multiple roles, they ‘cannot wear more than one hat when sitting at the table as a trustee…’ A trustee’s fiduciary duty does not require opposing benefit reductions… Trustees must keep in mind that benefit reductions improve the fiscal soundness of a fund. This fact highlights the potential conflict of interest for a trustee who is also a member…” (Ian Lanoff, fiduciary counsel for Groom Law Group in Washington, DC, “Comments on Fiduciary Duty,” Illinois TRS Board Meeting, August 4, 2011).
Though many of us realize some of the past Illinois General Assemblies, governors, and union leaders have not safeguarded the state’s public pension systems, many of us also know the antiquated revenue system in Illinois is making Illinois overdrawn. As previously alluded, the general populace is not aware of the “real” issues or problems in Illinois: the state's lack of revenue growth and pension debt. People have been duped by the Civic Committee’s and Chicago Tribune’s antagonistic and fallacious reasoning.
“Poisoning the Pension Well: TRS Executive Director Dick Ingram’s Shift in Position" (April 2);