Thursday, May 23, 2013

As to Breaking Contracts through Pension Reform in Illinois

Consider Public Policy (Dedicated to the Discussion of Public Questions as Moral and Economic Propositions) in July 22, 1905:

“As to breaking contracts… there is no moral exemption for any man or body of men [or women] that breaks contracts. Nor is there any hope of public or private respect for a contract breaker. A contract breaker is an utter misfit as a citizen or a business [person]…

“The persistence of the centuries has broken the bondage of the individual man—and the American nation is the expression of this triumph. But democracy, under whose banner the slow and tenacious progress was made, had one steadfast dream—the development of all the people. It broke the vested privilege of the monarchs and the nobles that all men together might rise steadily and forever, step by step, with the up-growth of civilization. And the American nation, which speaks to the world as no other nation is commissioned to do, in the name and with the voice of democracy, will not let its enfranchised individual carry his liberties so far as to defeat the interests of his fellowmen, and will not replace the abolished privilege of the nobles with a new privilege of the rich…” (Franklin MacVeagh, former President of the Commercial Club of Chicago and U.S. Secretary of Treasury on the honoring of one’s contracts…).

Consider this Letter by Gino L. DiVito of DiVito, Tabet & Rothstein LLC. DiVito addresses a Chicago Tribune Op-Ed article by Eden Martin of the Civic Committee of the Commercial Club of Chicago, April 13, 2010:

“…The plain language of the Illinois Constitution’s Pension Protection Clause (Article XIII, Section 5) states that, “Membership in any pension or retirement system of the State… shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.” As courts in this State have confirmed, this language is crystal clear. Public employees become members of a pension system at the time of hire or shortly thereafter and, once they become members, their pension rights are set and cannot be ‘diminished or impaired…’

“Not surprisingly, as it noted in a 1996 decision (McNamee v. State of Illinois), the Illinois Supreme Court has ‘consistently invalidated amendments to the Pension Code where the result is to diminish benefits’ to which state employees acquired a vested right when they entered the pension system…

“Any pension reform will depend on the strength of its legal foundation. The Governor and the General Assembly have been careful to comply with the Illinois Constitution’s Pension Protection Clause [until recently], as well they should [respect a constitutional contract]. The alternative would be a short-lived pension reform that is invalidated by court order after protracted litigation, which would be a disservice to the taxpayers” (Gino L. DiVito, a Letter).

Both Senate Bill 1 and Senate Bill 2404 diminish and impair Article XIII, Section 5 of the Illinois Constitution. Both bills deny retirees’ and current public employees’ rights under Article I, Section 16 of the Illinois Constitution (Ex Post Facto Laws and Impairing Contracts). Both bills will also violate the U.S. Constitution under Article I, Section 10 (Limitations on Powers of States or impairing obligations of contracts/Ex Post Facto Laws).

Please click on and also read: 12 pragmatic reasons to reject Illinois pension reform

1 comment:

  1. Have Americans become so apathetic as to stand for this! Just burn the Constitution and be done with it!