Friday, June 8, 2012

HJRCA 49: What it means and why you should be concerned by Addison Woodward May 9, 2012

HJRCA means House Joint Resolution Constitution Amendment, and HJRCA 49 sailed through the House and the Senate. Only two no votes were cast and that was in the Senate. HJRCA 49 was introduced by Speaker Madigan with the support of the Senate President.

The amendment introduces the term “emolument increase.” That term refers to the “creation of a new or enhancement of an existing advantage, profit or gain that an official or employee receives by virtue of holding office or employment including, but not limited to, compensated time off, bonuses, incentives, or other forms of compensation.” In its simplest terms, it means for any increase in an annuity or pension a super majority vote of the House and Senate (60%) is needed. 

Further, it requires a three-fifths vote of any governing board of any unit of local government or school district or any agency for a beneficial determination. In short, anything other than a salary or wage increase that could increase a pension or annuity would need a 60% vote supporting the increase from the governing body and/or both chambers of the General Assembly.

Why should you be concerned?  Most immediately the COLA could be considered an increase in your pension. I am sure one or more lawmakers might make the argument that since the COLA increases your pension that ‘granting” a COLA for a particular year would require a 60% vote in support of such action.

Any change to some of the worst provisions of the new pension law impacting recently hired employees would need a 60% vote in favor of relaxed provisions of that bill. That is what is meant by “beneficial determination.” Remember new employees must work until age 67 or be penalized 6% a year for retiring before that. The COLA is also reduced and does not compound, and there is a cap on pensions of $106,800.

Finally, there is this to consider: “Nothing in this section shall prevent the passage or adoption of any law, ordinance, resolution, rule, policy, or practice that further restricts the ability to provide a 'benefit increase,' 'emolument increase' or 'beneficial determination' as those terms are used under this section." It is this provision that many believe will be used to neutralize the pension protection clause. Actually this clause may supersede the pension protection clause since it is an amendment.

Do you get the picture? Benefits that retirees currently enjoy and benefits that current employees are looking forward to enjoy are in extreme jeopardy. Furthermore, the pension provisions that impact new employees in deleterious ways will be much more difficult to change, as will any new pension changes that occur between now and January 9, 2013, if this amendment is supported by the voters this fall.

It is incumbent upon you and your family, friends and any public employee you know to vote NO on this amendment on November 6th.  VOTE NO ON HJRCA 49!

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