A
horrible mistake is being made by the We Are One Illinois (WAOI) coalition. Everyone wants to
seem reasonable and present a reasonable public image. The danger is in
offering what seems reasonable while the offer itself has unintended disastrous
consequences.
“With a guarantee that the state would pay its
portion, the members who are reliant on the pension systems for their
retirement security would offer to help the state by paying more even though
they have contributed their portion over the years. [This increase may differ
for the various pension plans]” (WAOI).
This
is a successful, common, legal trap used by lawyers for over a decade. Once a
retiree accepts a different pension plan, no matter how minor the change, the
one providing the pension is legally recognized as having the right to alter
the new pension plan in any way it deems necessary. All past plans are null and
void. Courts have decided on this repeatedly.
Even offering to have retirees pay more could be used in court to prove the desire of retirees to have a new pension agreement due to what they themselves deem an excessive financial claim.
Even offering to have retirees pay more could be used in court to prove the desire of retirees to have a new pension agreement due to what they themselves deem an excessive financial claim.
The
full explanation and legal references are available for your reading in Retirement Heist
by Ellen E. Schultz. Excerpt from page
170: “To enhance their chances of success… [Employers] started to use a
strategy outlined by [various] managers: creeping take-aways. This involves taking small steps – increase
premiums a small amount, or perhaps start changing premiums in the future…
Then, a few years later, the [employer/state] cuts benefits in a big way,
saying the retirees’ prior lack of legal action signaled tacit agreement that
the [employer] could change the plan.”
PLEASE
LET THOSE WHO NEGOTIATE KNOW THE HISTORY OF THIS SUCCESSFUL PENSION-DESTROYING
TACTIC. PLEASE PASS THIS ON.
-
Ken Previti
Other pertinent quotations from Retirement
Heist by Ellen E. Schultz to consider:
“The
same crowd that created this mess—employers [legislators], consultants,
and financial firms [the Civic Committee]—are
now the primary architects of the ‘reforms’ that will supposedly clean it up”
(6).
“The
irony is that all these employers [legislators], and many others, had already
been quietly siphoning billions from… pension plans for years. They were merely
seeking ‘reforms’ that would open the spigots even further” (12).
“…401(k)s
[are] merely the bastard stepchildren of dead pensions” (25).
“[Employers/legislators]
blame investment losses for their plight, as well as their aging workforces,
union contracts, regulation, and global competition. But their funding problems
were largely self-inflicted. Had they not siphoned off the assets, they would
have had a cushion that could have withstood even the market crash that
troughed in March 2009… [Their] solution when funds run low remains the same: Cut
pensions” (27-8).
“[Reform]
wasn’t designed to save money, just redistribute it” (33).
“The
cash-balance plan… was a pension plan ‘masquerading as a defined contribution’
savings plan… ‘It’s [a] way to disguise the cutbacks in [public employees’]
benefits’” (36-7).
“’…Corporate
America uses cash-balance plans to mask significant reductions in pension
benefits and costs’” (47).
“Pension
plans weren’t just piggy banks to tap for cash. They were also cookie jars of
potential earnings enhancements” (55).
“[Employers/legislators]
claimed to be shocked to find that costs [are] so high. This, they said,
call[s] for hard choices, and regretfully, they…have to cut benefits [to public
pensions]. It [is] a matter of survival” (66).
“Employers
[legislators] continue to use the public’s ignorance of accounting and the way
retiree benefits work to bamboozle analysts, employees, retirees, unions… and
the courts” (197).
“Employers
[in this case, legislators, the Civic Committee and the Chicago Tribune] have
used the opaque retiree accounting rules to dupe a gullible public. When it
comes to retiree benefits, stirring people into a frenzy about supposed
problems has always been an effective way to distract them from real problems
and disguise the purpose of the proposed solutions” (202).
“The
architects of today’s retirement mess—[legislators,] consultants and financial
firms—have also played a non-starring role in the public pension debacle… [In
Illinois, legislators] drained assets from pension plans… enabling [themselves]
to conjure up cash for popular projects, without raising taxes, and look like
community heroes” (213).
“The
scapegoat game continues. [Employers/legislators] are still blaming aging
workers, retire ‘legacy costs’ and ‘spiraling’ retiree health care costs for
their financial woes—not their own actions that squandered billions of dollars
in [public] pension assets, their thinly masked desire to convert benefits
earned by and promised to retirees into [funds for others]…, and their
willingness to sacrifice retiree plans and the well-being of retirees, for
short-term gains” (214).
“In
the public sector, the scapegoats are the public employees and retirees, who
are beginning to have the haunted look of victims of Salem witch hunts. The
real culprits are the self-serving politicians and officials who passed the
funding buck to future generations, the consulting firms that helped them do
this, and the investment banks that conned local governments into investing
taxpayer-funded pensions in risky, abusive investments” (214).
“[In
Illinois,] the [public] pensions people have earned are legally-earned delayed
compensation, protected by law… Retiree…benefits…are protected by negotiated
contracts” (215).
-- Schultz, Ellen E. Retirement Heist, How Companies Plunder and Profit from the Nest Eggs of American Workers. New York: Penguin Group, 2011.
-- Schultz, Ellen E. Retirement Heist, How Companies Plunder and Profit from the Nest Eggs of American Workers. New York: Penguin Group, 2011.
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