The following article is by Bernard Schoenburg at The State-Journal Register:
Illinois Senate President John Cullerton said Wednesday he’s working to build support for a compromise pension reform plan that would save $138 billion over 30 years.
“There’s a compromise that we’re talking about right now,” Cullerton told the editorial board of The State Journal-Register. But he said that while the legislative pension reform committee worked to develop and evaluate the plan, that group has yet to reach agreement.
The Chicago Democrat said he supports the plan, adding that he hopes it can be acted on during the veto session scheduled to begin Oct. 22.
Elements of the compromise include having what is now a 3 percent compounded cost-of-living adjustment added to pension payments changed to half of the Consumer Price Index. Cullerton said the COLA couldn’t drop below 1 percent.
“It has a ceiling of 4 percent,” he added, “which is important because if there is inflation, there could be an actual opportunity for people to … get more than they’re getting now.”
Estimates are that the proposal would have state pension funds fully funded by 2043. The proposal would also decrease active employee contributions by 1 percentage point…
[According to Cullerton,] the combination of reduced employee contributions and inflation protection afforded by allowing the COLA to potentially rise to 4 percent could solidify the argument that the plan meets requirements of the state constitution, which doesn’t allow pension benefits to be diminished…
Cullerton said he expects unions, who had agreed to SB 2404, to oppose the hybrid plan now on the table, and added that it could end up challenged in court.
“That’s fine with me, because if it were to pass and be ruled unconstitutional, we’d go right back to the bill we passed that the unions supported, tweak it some more, get some more savings — that’s my opinion — and then pass that.”
The proposal would need 30 votes this fall to take effect July 1.
"Hopefully, I can get to 18,” Cullerton said of Democrats in the Senate. That would mean that the GOP would have to provide at least 12 votes…
Read more: Cullerton backs pension reform plan to save $138 billion by Bernard Schoenburg, State-Journal Register
The media has reported that University Presidents are very much in favor of allowing COLAs for their current and retired employees be slashed from 3% to to half of the Consumer Price Index. Even though University Presidents are strongly advocating this half of the Consumer Price Index COLA formula, do the current employees and retired employees of their universities share these same views.? I doubt it.
ReplyDeleteAs a former university employee, there has been no public discussion at my university within the academic community about this proposal. This I think leaves the impression with the media and the politicians that all university current and retired employees are on board with this proposal. Believe me--they are not.
I would assume since University Presidents are provided with both hefty compensation during their presidencies and for retirement, they do not see having their 3% COLA taken away from them will impact their standard of living. However, university employees are a different matter. Such a cut in a retiree's COLA will result in a diminished pension, which in turn will result in a diminished standard of living for each and every retiree
Dear Earl,
ReplyDeleteIf you haven’t read this post, “Illinois Pension Reform: My address to members of the State Universities Annuitants Association on April 26th,” please do. It was a warning…
Copy and paste: http://teacherpoetmusicianglenbrown.blogspot.com/2013/04/illinois-pension-reform-my-address-to.html