Saturday, March 9, 2013

Unions have ideas to fix pensions by Dan Montgomery, President of the Illinois Federation of Teachers

For too long, unions have been characterized as roadblocks to getting our state back on sound financial footing. Nothing can be further from the truth. Rather, we are actively suggesting solutions and want to avoid legislative action that would only result in legal battles and poor public policy. We are not roadblocks. We are caregivers. We are emergency responders. We are public employees and teachers who do not receive Social Security. And despite having done nothing wrong, we are willing to accept some pain if it is part of a balanced plan, no matter how we got here.

But balance is nowhere to be found in Springfield. The current proposal — House Bill 3411 offered by Representatives Elaine Nekritz and Tom Cross — would take away more than 30 percent of our members’ life savings. Imagine the outrage if Congress proposed doing that to Social Security annuitants! This latest bill is unfair, unconstitutional and unproductive.
Public employees have faithfully contributed into the system from every paycheck, while politicians skipped payments, shirked their responsibility and ran up a debt that costs billions each year just to service. This unfairness bears repeating: We are where we are because Springfield borrowed more instead of paying the bill. And they used our pensions as collateral.

Secondly, the Nekritz-Cross proposal to resolve the pension problem is unconstitutional. As reason for their recent downgrade of Illinois’ bond rating, Standard and Poor’s warned that unconstitutional cuts would invite “legal challenges” and cause “several years” of uncertainty. Legislators took an oath of office to support the Constitution, yet many have said the courts should do their jobs for them. Passing an illegal bill to the courts is just passing the buck to taxpayers.
Lastly, the worst part of this proposal isn’t its injustice or surefire ticket to court. The worst part is that it only temporarily manages symptoms, but fails to treat the root cause. Because our state’s revenue remains flat while our expenses increase, we have an unsustainable structural deficit. And so to fund services such as education and public safety, lawmakers have used our retirements like a credit card and created a $98 billion debt, most of which are self-inflicted costs. Current benefit costs are a drop in the bucket compared to the state’s past-due bill. Slashing our pensions won’t fix the problem, because our pensions didn’t cause it.


1 comment:

  1. Retired Teachers, Do you know you paid into TRIP and COLA every paycheck?
    From the 2012 Teachers' Retirement System Handbook p.6:
    "Member contributions:
    As an active TRS member, you are required to contribute 9.4 percent of your gross creditable earnings
    (defined under “Earnings”) toward retirement each
    year. Your contribution consists of:
    • 7.5 percent for retirement annuities,
    • 0.5 percent for automatic annual increases in annuities, (COLA)
    • 1 percent for death benefits,and
    • 0.4 percent to fund the Early Retirement Option.
    You must also contribute a percentage of your gross creditable earnings to help fund the Teachers’ Health Insurance Security (THIS) Fund, which finances the Teachers’ Retirement Insurance Program (TRIP)."
    Having paid into the COLA and THIS/TRIP, to deny benefits to retired teachers is unconstitutional.