Tuesday, May 12, 2015

Senate President John Cullerton presented his updated pension reform plan in the Illinois General Assembly today aimed at circumventing the Pension Protection Clause

So what can we expect from the pension thieves of the Illinois General Assembly just four days after the Illinois Supreme Court Ruling? Is it all just poppycock? Here is the first of many blustery attacks on public employees and retirees to come.

“Lawmakers returned to the Capitol on Tuesday [May 12] facing renewed pressure to overhaul the state's employee pension system after the Illinois Supreme Court struck down a law aimed at sharply curbing benefits, with Senate President John Cullerton proposing an updated version of a plan he floated two years ago. 

[The We Are One Coalition of Unions (the IEA, IFT, Illinois AFL-CIO, AFSCME, et al.) mutually assented to Cullerton's diminishment of our pensions on May 6, 2013. There should never have been any negotiation of our constitutionally-guaranteed benefits and rights with the Illinois General Assembly. Only the Illinois Retired Teachers Association disagreed and hired Tabet, DiVito & Rothstein LLC to defend our constitutional guarantees at that time].

“While details are still being worked out, Cullerton's plan amounts to giving government workers a choice between keeping more generous yearly cost-of-living increases or continuing to count pay raises in calculating their retirement benefits… 

“Cullerton's pension plan is aimed at working around a clause in the Illinois Constitution that says once someone is in a retirement system, they've entered into ‘an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.’ 

“Justices appeared to offer little in the way of a path forward other than requiring the state to pay up, but Cullerton contends the ruling left open the possibility for changes to be made based on a theory in contract law called ‘consideration.’ Under that theory, Cullerton says, benefits can be scaled back, but only if workers agree to the changes and are given something in return.  

[Simply stated, “Consideration is when a claimant promises something in exchange for the defendant’s promise, [or] the inducement to a contract, something of value given in return for a performance or a promise of performance by another, for the purpose of forming a contract…” (Law Dictionary). “It is well settled that a contract, once made, must be performed according to its terms, and that any modification of those terms must be made by mutual assent and for consideration” (Ross v. May Co., 377 Ill. App. 3d 387, 389 (2007))]. 

“As such, the plan Cullerton floated Tuesday calls for giving employees a choice about their retirement benefits. Under the first scenario, a worker could choose to not have future pay increases factored into their pensions. In exchange, they would receive an annual 3 percent compounded cost-of-living pay increase. If they chose to count pay raises toward their pensions, workers would receive lower annual cost-of-living increases that are not compounded over time.

“It's a revamped version of a Cullerton proposal that passed the Senate in 2013 with union support that would have allowed employees and retirees to choose between compounded cost-of-living increases or health care benefits. That measure was never called for a vote in the House, as critics argued it would save about a third of the more sweeping proposal that ultimately became law but was struck down last week…”

For the complete story, click here.

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