Monday, September 30, 2013

Elaine Nekritz believes “pension reform” could be presented to lawmakers in the Veto session next month

“…Nekritz acknowledged that public employees have paid their pension contributions while politicians for decades have not adequately paid the state's employer share. But she said, ‘To [a Chicago Tribune reporter] the most immoral thing that could happen is to say to someone, a 75- or 80-year-old retiree, I'm sorry, the system's broke. I can send you no check. I would rather make the increases in their benefit going forward smaller and know that the system is secure so they know they're going to get a check in the future’” (Lawmaker: Pension plan 'very likely'for veto session).

Commentary

1.      Reforming the debt that is owed to public pensions and restructuring the state’s unfair revenue system will solve the “broken system” that politicians have created.
2.      Public employees will “get [their] checks in the future.”
3.      So-called “pension reform” or breaking a constitutional contract will end up in court.
4.      Nekritz and other politicians have ignored:

“…The Pension Code sufficiently manifests intent to make pension payments the obligations of the State when due… [T]he Illinois Pension Code Article of each of the five state-funded pension systems contains a provision with sufficient language binding the State to pay pensions even if a system defaults. Each provision states in pertinent part that ‘[t]he payment of the required department contributions, all allowances, annuities, benefits granted under this Article, and all expenses of administration of the system are obligations of the State of Illinois to the extent specified in this Article…’” (Madiar (2011), Is Welching on Public Pension Promises an Option for Illinois? An Analysis of Article XIII, Section 5 of the Illinois Constitution) (link: What happens if the Illinois public pension funds are “on the verge of bankruptcy?). 

“The [Pension] Clause stands as a constitutional guarantee that pension recipients will receive their pension payments when due even if a pension fund defaults or is on the verge of default. Any state pension participant placed in such a position would have a cause of action in circuit court to enforce this guarantee and obtain payment directly from the State’s General Fund. A participant need not pursue payment before the Illinois Court of Claims and depend upon the largesse of the General Assembly” (IS WELCHING ON PUBLIC PENSION PROMISES AN OPTION FOR ILLINOIS?
AN ANALYSIS OF ARTICLE XIII, SECTION 5 OF THE ILLINOIS CONSTITUTION by Eric M. Madiar, Chief Legal Counsel to Illinois Senate President John J. Cullerton and Parliamentarian of the Illinois Senate). 

“[Moreover,] Pensions will not run out of money… [That] assumes that at a future date, state pensions will just cease and all outstanding financial obligations will come due… Unlike a corporation, a state government cannot go out of business… [Accordingly,] state law empowers TRS (40 ILCS 5/16-158c)… Payment of the required state contributions and of all pensions, retirement annuities, death benefits…, all other benefits…, and all expenses are obligations of the state… The state has waived its sovereign immunity in regard to the teachers’ pension because TRS is a qualified pension plan under the tax-deferred provisions of the IRS code.  Federal law would protect all claims… Pensions [are not] the problem [or] why Illinois has been unable to pay its bills.  The reason is the dramatic fall-off in state revenues over the years, costing the state billions” (Dave Urbanek, TRS, 2011).

“The most immoral thing” currently happening to all citizens of Illinois is the General Assembly’s blatant disregard of the State and U.S. Constitutions. 

1 comment:

  1. Illinois legislators ignore the fact that the state “suffers from structural deficits or from failure of revenues to grow quickly as the cost of services…, [and that] structural deficits stem largely from out-of-date tax systems, coupled with costs that rise faster than the economy… Fixing these structural problems would help [Illinois] balance [its] operating budgets without resorting to [a reckless and radical ‘pension reform’ instigated and propagandized by the Civic Committee, Civic Federation, Illinois Policy Institute, Chicago Tribune, and the legislators they influence]” (The Center on Budget and Policy Priorities)

    ReplyDelete