Friday, August 10, 2012

Amending Pension and Retirement Rights through “Consideration”

Simply stated, “Consideration is when a claimant promises something in exchange for the defendant’s promise.”

Consideration should have “value” that is fair to both sides. However, contracts supported by consideration are often one-sided, advantageous arrangements. We could imagine that any agreement with the Illinois General Assembly regarding “guaranteed” funding to the pension systems would not be a “valid” consideration for public employees, for example, because it would be in exchange for reductions of originally-vested benefits guaranteed by the Illinois Constitution.

What’s more, there is no question whether legislators will renege on a new promise made to public employees. The question is how soon it will happen. Legislators can rewrite or undo any bill they pass. A conversation with any representative will verify this incongruous reality. Any "Quid Pro Quo" guaranteed by legislators will inevitably become a "Failure of Consideration."

“Funding” public employees’ pensions would have to be written into the Illinois Pension Code (40 ILCS 5/) to be considered a “benefit” guaranteed by the state constitution. In this way, consideration would create a contractual cause of action for the full enforcement of that expectation – an irrevocable binding contract between the state (legislators) and public employees (or would it?). This will not occur, however, because House Speaker Michael Madigan and other legislators want to shift the normal costs of the teachers’ retirement pension to local school districts and property taxpayers, and this proposal reveals rather obvious legislative intentions.

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1 comment:

  1. "We promise to do what we broke our promises on for over fifty years." - The Madigan Gang

    "Yeah, but did you cross your heart and hope to die if you lie? Did you spit on the ground and cross your heart with your right hand? Huh?" - IEA

    "Sure! Would I lie to you?" (Crosses his fingers behind his back as he speaks.) - Little Mike

    -Ken Previti