Thursday, April 12, 2012

Message from Cinda Klickna, president of the IEA


Colleagues:

I wanted to take a moment to update you on the fight to make sure every IEA member gets the pension that he/she has been promised.

As IEA President, my focus is always on our members.  On the issue of pensions, that means protecting benefits of members as well as funding of the pension systems. The main discussion should be and must be - as it has always been- the funding of the pension systems.

We refuse to allow the conversation about how to fix the systems to be focused solely on benefits. The top issue is funding – it’s how we got into this mess, and only through funding can the pension systems get back on solid financial footing.

The Illinois Constitution makes it clear that benefits for state pension system annuitants cannot be diminished or impaired. IEA has always insisted that any pension ideas that we would be willing to consider must be constitutional and fair to members.  That has not changed, nor will it.

The TRS Trustee Resolution:
The TRS trustees recently approved a resolution on pensions that has not been well explained in the news media.  Read the resolution.  The resolution is clearly focused on funding of the systems. It calls upon the state of Illinois to get serious about its debt to the pension systems (the state currently owes more than $43 billion to TRS alone). The state ran up this debt by using “Illinois math” to decide how much to pay the state systems. The TRS resolution is a call to end this practice.

Among other things, the resolution:
    --Calls on the state to pay the systems the amounts dictated by actuarial science (the amount the state needs to contribute to ensure the systems remain capable of paying benefits to current and future retirees)
    --The problem is that the state for decades has paid, essentially, what it has felt like paying and has given the pension systems an I.O.U. for the remainder. This is what has caused the pension crisis
    --Calls on the state to fix Tier II, the new set of pension benefits that went into effect for employees hired after January 1, 2011
    --The contribution Tier II employees make exceeds the value of the benefit; therefore, the employee is paying some of the State's portion.  To fix that, the State needs to pay more. This must be addressed and it will cost the state money to do so.

Solutions:
It is important to understand that, though the TRS Trustees and TRS Executive Director, Dick Ingram, are very focused on the pension problem, they have not made any proposals for addressing the crisis and do not intend to do so. That is not the role of TRS.  It is the responsibility of the unions representing the participants in the pension systems to engage in discussions about proposals that could impact their members.

There has been a lot of discussion regarding comments attributed to Mr. Ingram about the COLA. Please note that the trustees’ resolution does not reference COLA. That is NOT part of the resolution adopted by the Trustees.  The reason COLA is being discussed at all is because the cost of it is huge ($50 billion out of TRS's liability of $81 billion), and legislators have mentioned this cost for a long time.
  
Even though the media attention to Ingram’s comment has diverted many people's focus to anger and distrust, your association’s focus has not changed; we are fighting to find funding solutions to the Illinois budget pension problems.  We will only consider constitutional proposals. IEA attorneys, as well as those representing the other members of the labor coalition, will guide us. All of these top-quality legal minds understand what is, and isn’t, constitutional.

What you can do :
Current and future annuitants have a huge stake in this issue. You owe it to yourselves to be informed and to make your feelings known.
     --Attend Dick Ingram's TRS town hall meetings
     --Listen to the data, ask questions, raise your views
     --Don't get diverted by the media who want to create distrust from within our own ranks 
        INSTEAD, direct the conversation with legislators, etc. back to the real focus - funding of our   pensions 
     --Check the IEA website for updates and be prepared to act on short notice on any legislation regarding your retirement benefits.

I assure you, as your IEA President and as a TRS Trustee, IEA and TRS will never stop fighting for the people we represent. We remain deeply concerned about the future of pensions for all our members and we continue to work daily to ensure our members get the pensions they have paid for. Thank you for your support and your continued work in contacting legislators. 

1 comment:

  1. This is a well written statement, so kudos to Cinda for making it.

    However, I don't think that any distrust that exists can be attributed solely to the newspapers jumping on Ingram's email, although clearly they are making hay of that. I think there's a systemic trust problem caused by the SB 7 history.

    Nevertheless, it's a good statement. The only improvement I could suggest is perhaps a clearer explanation of actuarial science point.

    For example, in this statement, it appears that Cinda is reiterating the well-known point that the state typically doesn't contribute the amount that the TRS actuaries determine and the Board certifies. The state contributes a lesser amount.

    However, I get the feeling from the complete TRS statement that TRS is saying that they're going to change the actuarial method, which is unsettling, since people would assume the actuarial method employed by TRS has always been generally accepted as sound. That's what I've walked away with, anyway. It still isn't clear to me that TRS is using a different method, or if they're using the same method with different assumptions embedded.

    So, that could use some clarity. It's very difficult to point to put into every day language, but this appears to be something Cinda is good at. She should have another crack at it.

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