Thursday, July 9, 2015

Is it possible the IEA et al. might negotiate another pension reform bill?

On July 2, 2012, John Dillon, Fred Klonsky, Catherine Lenzini, Michael Cousineau, and I met with the IEA leadership to discuss our concerns about the IEA's willingness to negotiate teachers' and retirees' constitutionally-guaranteed pension benefits and rights. Of course, the IEA leadership did not heed our advice.

Instead, 10 months later we witnessed the folly (and irony) of the IEA leadership's eagerness to bargain teachers' and retirees' constitutionally-guaranteed pension benefits and rights with Senate Bill 2404 in May of 2013.

Consider the IEA's “Frequently Asked Questions” Bulletin on SB 2404, dated May 20, 2013:

Who made the decision to negotiate a pension agreement?

“The decision to negotiate was arrived at after consulting with legal and legislative experts and reviewing research, which included hundreds of interviews with IEA members. The IEA Executive Committee and the IEA Board of Directors approved the decision for IEA to work with the union coalition to try to get an agreed-upon bill. Those bodies have been kept informed about progress throughout the process…

Isn’t losing access to State-provided healthcare a violation of the constitution?

“No. Access to State-provided healthcare/insurance for teachers and most university staff is currently not guaranteed by the constitution. If SB 2404 is passed, State-provided healthcare would become a vested and enforceable contractual right, a status it does not have today.

Since I pay a portion of my salary to TRIP, why isn’t continued access to TRIP contractual under the provisions of the Illinois Constitution?

“A law does not create contractual rights unless it specifically states that it does. The TRIP statute does not provide that it creates a contractual right to a state-provided program of health benefits, even though teachers make contributions to help fund TRIP during their active teaching careers. The TRIP statute further states that it may be amended by the state and is not intended to be a pension or retirement benefit protected by the pension clause of the state constitution.

Explain "three-year delay in 3 percent compounded COLA,” “staggered COLA,” “two-year freeze in non-consecutive years mean?”

“Current law says that when an employee retires, a compounded COLA kicks in the January after the retiree turns 61 years old. This is retroactive for each year that one has been retired. (Example: If someone retired at age 55, there would be six years of retroactive COLA = 18 percent). This provision has not changed.

“Under SB 2404, if someone has already begun receiving a COLA, the staggered freeze would begin immediately in 2015. Year one: Freeze getting a COLA; Year 2: Again receive the 3 percent compounded COLA; Year 3: Freeze getting a COLA; Year 4 until death: Receive a 3 percent compounded COLA.

Why wasn't the IRTA called to the table to negotiate?

“The IRTA is not a labor union and thus is not part of the We Are One Coalition, the group that was called to negotiate by Sen. Pres. John Cullerton. The unions that comprise the We Are One Illinois coalition believe it is in the interests of all their members, active and retired, for the state pension systems to remain able to pay benefits and for the state to be able to deliver key services such as education, healthcare and public safety. IRTA has said it doesn’t believe it has a stake in the pension discussion. [?]

“Among the organizations of retired public employees who support SB 2404 are:
·         IEA Retired Council
·         IFT Retired Teachers Constituency Council
·         Retired State Employees Association
·         State University Annuitants Association
·         Illinois Alliance of Retired Americans
·         AFSCME Retirees Chapter 31

[Another good reason to join the Illinois Retired Teachers Association: The IRTA was the only association to not support SB 2404 and launched its own legal defense fund to challenge enactment of any pension legislation believed to be unconstitutional. Gino DiVito, a former appellate court justice and founding partner of the Chicago firm of Tabet DiVito and Rothstein, issued a legal opinion to the IRTA that declared unconstitutional proposals similar to Senator Cullerton’s. We all know who then led the charge against Senate Bill 1.]

Please explain why the IEA prefers SB 2404 rather than SB 1:

“SB 1 significantly (and, we believe, in violation of the Illinois Constitution) lowers the benefits for active employees by raising the age required to work, adding employee contributions for all members and lowering the COLA for all (retired and active). And it does that without any of the consideration (as described above) found in 2404.

“SB 2404 aligns with the principles IEA has held from the beginning for pension legislation:
·         Must be constitutional;
·         Must be fair to all members;
·         Must stabilize the pension systems.

Why do we believe that the language in SB 2404 calling for "guaranteed funding" will be respected by future legislatures?

“SB 2404 specifically states that the state’s obligation to fund the retirement systems is a contractual obligation protected and enforceable under the Illinois Constitution, including the pension clause. To amend or do away with it, the state would have to follow the same choice/consideration process it has been going through to make the changes included in SB 2404. It is extremely difficult to envision what consideration the state could constitutionally offer in exchange for modifying or doing away with the funding guarantee included in SB 2404… 

How would SB 2404 impact the ability of retirees to purchase health insurance through the state?

“Under current law, access to state health insurance for retirees is not a vested enforceable contractual right. If SB 2404 becomes law, it would become, for the first time, an enforceable contractual right. SB 2404 does not make the cost of the insurance premium a contractual right. While access would become a contractual right, it would not be a retirement benefit protected by the Illinois Constitution’s Pension Clause…”


It was a good thing for all of us Madigan did not call a vote for SB 2404!

Should we worry about the IEA et al. and Rauner et al. negotiating the Pension Protection Clause?  One would think the most recent court rulings, KANERVA v. WEEMS (July 3, 2014) and HEATON v. QUINN (May 8, 2015), will inspire the union leadership to heed the advice from five concerned IEA members three years ago. However, keep in mind that the offer of "consideration" ("modifications of contract principles") is never off the table with the IEA and other unions. 

The IEA made this quite clear in the meetings last April at the Representative Assembly when they struck down this revision that would have guaranteed our rights and benefits: "The Association opposes any diminishment or impairment of the pension benefits for current and future members." 

The IEA effectively duped its members into voting against the proposed revision when Mitch Roth said to the delegates that the IEA would have to "leave the We Are One Coalition of Unions" if it was ratified.

Though in yesterday's Chicago Sun-Times (July 8) “We Are One Illinois, a labor coalition representing more than a million state union employees called Rauner’s [new pension reform] bill framework ‘unconstitutional, unfair to workers and retirees and a waste of taxpayer dollars and time’” (Rauner’s Pension Plan: Cut Benefits for Cops, Firefighters, Teachers), does anyone believe that SB 2404 would not have been "unfair to workers and retirees and a waste of taxpayer dollars and time"? It also would have been a tragic and unnecessary diminishment and impairment of rights and benefits that were earned and then protected by the Illinois Constitution once again! Do I believe that the union leadership will not re-negotiate public employees' and retirees' rights and benefits protected by the Illinois Constitution? Do you?


  1. Let's do hope that leaders from all the unions representing state employees will heed the collective wisdom and advice from you , Glen, Fred and the others you mentioned. As a retired member of AFSCME I am concerned that AFSCME and the other unions will once again allow the Governor bully them when it comes to both pensions and health insurance If this happens, I am sure union members will start questioning the effectiveness of their union membership

  2. At the time, only the IRTA firmly believed SB2404 was unacceptable and "unfair to workers and retirees and a waste of taxpayer dollars and time"? Only the IRTA called SB2404 a losing trade-off that would have been a tragic and unnecessary diminishment and impairment of rights and benefits that were earned and then protected by the Illinois Constitution! We now know that Illinois legislators in at least two of the three branches will not seek new revenue streams, will not stand down after the May 8th unanimous decision of the Illinois Supreme Court to uphold the Pension Protection Clause. Instead, they and their new governor will continue to look at the pensions and our funds as ripe and low-hanging fruit. Even though Helen Kinney and Henry Green provided us all with carefully worded protection against these immoral attempts, they will not abate. As in the past, this is not a time for any union or coalition of such to act with timidity; instead, our unions must refuse the twisted characterizations by media and prepare for continued legal battle.

  3. Good points Members in the unions, the coalition , and in my case the SUAA need to demand that these entities strongly advocate support Ifor llinois employees' constitutionally protected pension and health benefits,