Thursday, May 3, 2012

Funding the Illinois Teachers’ Retirement System: Should We Separate Our Moral Responsibility from Our Legal Obligation?

Thinking out loud and asking questions:

How do we define insolvency of a public pension system? Is it a bankruptcy? A public pension cannot go bankrupt, for it cannot go out of business like a corporation; besides, the teachers’ pension system will always have an unfunded liability. Did Executive Director Dick Ingram of TRS consider that Buck Consultants actuaries perhaps chose particular assumptions to ensure that their worst-case scenarios (their predictions) would be correct? A slight change in assumptions can yield a completely different forecast.

Should we ask whether there is any political motivation for claiming that the teachers’ pension system will become insolvent eventually?  Undeniably, “pension reform” is easier to pass (politically) if the public perceives that the system will become insolvent and taxpayers will bear the financial burden for past legislators’ irresponsibility and incompetence.

And should we ask whether there is an ideological motivation for claiming that the teachers’ pension system will become overdrawn?  Is it based upon a growing prejudicial idea that the Illinois state government should not provide a defined-benefit pension for its employees, promulgated by the Civic Committee of the Commercial Club of Chicago, the Chicago Tribune, Illinois Policy Institute, and others? What form of envy, prejudice and self-interest are at play when some wealthy people scapegoat teachers?

What ideology underlies the state’s desire to shift responsibility? Do legislators believe that teachers should be more responsible for their retirement, or is it simply the fact that the state does not want to keep its promise to teachers? Has anything really changed now that the current legislators are given multiple opportunities for specious reasoning from the media and Civic Committee for reneging on debts owed?

The belief that the possible insolvency of the Teachers Retirement System of Illinois must be solved by cuts to teachers’ benefits is ironical, especially when the system can become solvent by an increase in state revenue and an elimination of tax breaks to the wealthy. As most people know, the wealthiest among us have accumulated a growing portion of the state (and national income).

What ideology underlies proposals to cut teachers’ benefits and to increase their retirement age? Do some policymakers believe that teaching longer, until age 67, will increase students’ learning or improve test scores? Is it a belief that teachers do not deserve the leisure of a retirement? Is it to reduce the number of pensioners (for increasing the retirement age will increase the likelihood that the teacher will die before collecting a pension!)? What kind of enticements is being proposed by Governor Quinn and others for a delayed eligibility for retirement? Would health care insurance from the state be a windfall for someone over 65 years old receiving Medicare? Why else would Quinn and policymakers propose penalizing teacher retirees through pension reduction? 

Thomas Hobbes, a 17th century philosopher, argued that people are motivated solely by selfish interests and greed. When considering some policymakers and business leaders in Illinois, it is difficult to disagree with Hobbes’ assertion. On the other hand, David Hume, an 18th century philosopher, ascertained the idea that keeping a promise depends upon creating rules of justice; that rules of contracts, for instance, have to be considered morally desirable. In other words, a “contract” or promise between the state and its public employees must be viewed as a moral commitment and requirement of justice. Justice demands that we keep our “covenants” with one another. Keeping an agreement means a concern to promote the well-being of teachers (and other public employees) and the need to secure their rights.

Indeed, contracts in the business world are binding. Recall what TY Fahner of the Civic Committee and a former Attorney General of Illinois said regarding reneging on contracts in his interview with Phil Ponce on WTTW (April 25): “This [public pension financial mess] was not created by the people entitled to the benefits... Well, if this happened in the private sector… if someone didn’t pay in the money… there would be prosecutions going.” Social, political activist and blogger Fred Klonsky commented, “instead of indictments, the victims [teachers] of the [policymakers'] criminal behavior are being victimized once again.”

Acting ethically and morally is best described by Immanuel Kant, another 18th century philosopher, who said we should act toward others in accordance with principles that we all can sanction; from an unbiased perspective, we should treat others as “ends instead of means.” 

Indeed, what is at stake here is not a potential adjudication of conflicting claims that teachers and public employees will have against policymakers who may want to make changes to their benefits and rights, but to respect the teachers’ contractual and constitutional promises, because they are legitimate rights and moral concerns not only for teachers, but for every citizen in Illinois: for any unwarranted acts of cheating a person’s guaranteed rights and benefits will violate our interest in morality and ethics and the basic principles of both the state and U.S. constitutions that protect every one of us.

To understand this issue in a different light, policymakers should act in a way that reflects an impartial consideration that entails passing a law they would also find acceptable and binding on themselves.  According to a 20th century philosopher John Rawls, moral principles and covenants should be examined and chosen behind a “veil of ignorance.” Alford Professor of Natural Religion, Moral Philosophy and Civil Polity Thomas M. Scanlon of Harvard’s Department of Philosophy states that people should also act with the goal to find “mutually agreeable principles” that are both morally right and legally compulsory.

It’s imperative that policymakers and stakeholders examine their own ethical and moral principles and their conduct in view of the fact that they will have to justify their decisions to the rest of us. Though we have heard the mantra for pension “reform,” it is the wrong focus because the State of Illinois has a revenue problem; moreover, the wealthy among us are not a part of the so-called “shared sacrifice” for this proposed radical pension “reform” either. The vast hoarding of wealth by the few while most others live modestly or impecuniously is morally wrong. Proposing and passing pension “reform” will place an unfair and unreasonable discrimination upon teachers (and other public employees) for the sake of insignificant benefits for the wealthy.

Certainly, we should not separate our moral responsibility and our legal obligation to fund the Teachers’ Retirement System and other public pension systems. Furthermore, it is our moral duty and our legal concern to increase the state’s revenue and to tax the wealthy among us more fairly, so we can fund all the public pension systems of Illinois, instead of incriminating teachers and challenging the State and U.S. Constitutions. 

-Glen Brown

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