UPDATE: 12:55 pm, Thursday, Nov. 10, 2011 — The Illinois House is adjourned until Nov. 29. No action was taken on pension-cutting SB 512.
UPDATE 6:40 pm, Wed, Nov. 9, 2011 – The General Assembly has adjourned until Thursday morning without holding a floor vote on pension-cutting SB 512.
While Thursday is scheduled to be the final day of work in 2011 for lawmakers, House members were informed today that they should be prepared to return to Springfield for an additional session day on November 29.
SB 512 is awaiting a vote by the full House after passing a committee vote on Tuesday.
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Wednesday morning update: IEA members are urged to contact their legislators immediately to urge them to oppose the pension-cutting legislation, Senate Bill 512.
Senate Bill 512 (SB 512) would dramatically increase the contributions of active employees who started their jobs prior to Jan 1 of this yea and damage the state pension systems. (SB 512 details below)
The bill passed out of the House Pensions and Investments Committee Tuesday on a 5-4 vote. The bill was voted out of committee during the spring legislative session but was never called for a House vote.
IEA members are urged to contact their legislators immediately to urge them to oppose the pension-cutting legislation, Senate Bill 512.
- It is unconstitutional to reduce benefits for active employees.
- For most education employees, their pension is their only form of retirement security. Teachers can’t collect full social security, even if they have earned it through other employment.
- The employees have always paid their share. The pension problem is a result of politicians using the pension systems as a credit card to pay for other state services.
- Reasonable retirement benefits allow our schools to attract and retain the quality teachers and staff our students deserve.
- Call 888/412-6570, follow the prompts to be connected to your legislator and use the above talking points, or
- Go to the IEA website, click on the pension tab at the top of the page and you will see a link to e-mail your legislators.
Background
Last spring, the Chicago-based Civic Committee tried to ram SB512 through the legislature last spring, claiming it would cut state pension costs. The bill was never voted on because organized labor in general, and IEA members and staff in particular, lobbied vociferously against the proposal.
A report the Teachers Retirement System (TRS) released in the summer showed that the plan, if it had passed, would have increased pension costs to taxpayers by $34 billion over the first 15 years and by $62 billion by 2045. This was largely due to the Money Purchase Option, which calls for the state to increase its contribution to the retirement system on behalf of a participant when the contribution required of the participant is increased, as it would be under SB 512. (For example, under SB512, the 9.4% contribution rate for TRS participants would rise to 15.77 percent by July 1, 2016).
The new amendment introduced Monday would eliminate the state’s obligation to increase its contribution, but a report in Monday’s Springfield State Journal-Register points out:
…tinkering with the money purchase option might raise a constitutional issue. Drafters of the bill have tried to satisfy the state constitution’s prohibition of diminishing pension benefits by simply increasing employee contribution rates. They say increasing what teachers and state employees pay for pensions does not diminish the benefits themselves.
But if current teachers start paying more but get less from the money purchase option, does that mean the legislature has diminished the benefits?
The new pension plan from the Civic Committee, which may be introduced during this week’s legislative session, is unacceptable because:
- It is unconstitutional to reduce benefits for active employees.
- For most education employees, their pension is their only form of retirement security. Teachers can’t collect full social security, even if they have earned it through other employment.
- The employees have always paid their share. The pension problem is a result of politicians using the pension systems as a credit card to pay for other state services.
- Reasonable retirement benefits allow our schools to attract and retain the quality teachers and staff our students deserve.
(Read more about the revised SB 512 below)
All IEA members are urged to contact their legislators immediately:
- Call 888/412-6570, follow the prompts to be connected to your legislator and use the above talking points, or
- Go to the IEA website, click on the pension tab at the top of the page and you will see a link to e-mail your legislators.
To make sure you have the most updated news, please go to the “My Profile” section of the IEA website and update your contact information with a non-school e-mail address that you check as well as an updated phone number .
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“Highlights” of the revised SB 512:
- The employee contribution for TRS members who elect to stay in Tier 1 would increase to 13.77% of salary (from 9.4% of salary currently) beginning July 1, 2013 until June 30, 2016. Beginning on July 1, 2016 the contribution could only increase an additional 2% to a maximum of 15.77% of salary. The amendment also increases the contribution rates for those in SURS to 15.31% of salary during the same period (currently, 8% of salary). The final increase in contributions for SURS would put the member’s contribution at 17.31% of salary beginning in July 1, 2016. It is understood that after the first three years of the contribution increase, that the recalculation, as required by the amendment, will force member’s contributions up to the maximum increase of 2% whether they are in TRS or SURS
- The amendment changes the timeline for election and when it would apply to current member benefits. All benefits earned after July 1, 2013 would be impacted by either the new Tier 1 contribution level, participation in Tier 2 or participation in the DC plan.
- The increase in employee contribution cannot be used for the purpose of calculating the money purchase plan under the act. This is a clear decrease in an existing benefit.
- In school districts where the employee contribution is currently being paid by the employer the additional contribution required under the legislation would have to be renegotiated. This changes the terms of existing contracts. This is a new provision of the legislation.
Illinois Education Association is an association of more than 130,000 members composed of Illinois elementary and secondary teachers, higher education faculty and staff, educational support professionals, retired educators and college students preparing to become teachers.
Other than a strong dedication to the education of our students, the teaching profession has few incentives. One incentive, however, is a good pension program. To start making changes in the pension will attract fewer good teachers to the profession. In order to accomplish the goals of education, whether NCLB or the common core standards, we need good teachers. Do not discourage these good teachers by reducing what few incentives they have.
I’m so tired of these outside interests interferring with our pensions who have the luxuary of not worrying about their pensions because they are well off. Illinois will be so messed up that college students majoring in education won’t bother to try and get a teaching job. I used to say to myself about the legislatature “How can they in good faith do this to public servants?” Now, I know, lthey don’t even care.
You made a commitment to me when you hired me. You took funds that were to equal my contribution to the retirement fund and used them for other purposes. I am not using tax payer moneys for my retirement. These monies were to be inserted into the overall fund a long time ago. You stole them.
If you were not intending to keep your word, you should never have made the commitment, I am embarrassed by your behavior and would never have signed a contract with this state had I known the outcome.
A reminder about Defined-Contribution Plans:
Amendment SB512 (Nov. 7, 2011) pages 261-65
(40 ILCS 5/16-133.8 new)
Sec. 16-133.8. Self-managed plan
Purpose. The Teachers’ Retirement System of the State of Illinois shall establish and administer a self-managed plan, which shall offer members the opportunity to accumulate assets for retirement through a combination of member and employer contributions that may be invested in mutual funds, collective investment funds, or other investment products and used to purchase annuity contracts, either fixed or variable or a combination thereof. The plan must be qualified under the Internal Revenue Code of 1986.
The plan shall not include the retirement annuities, survivors’ benefits, death benefits, or refunds provided under this Article…
Neither the System nor the member’s employer guarantees any of the investments in the member’s account balances…
The System shall not be obligated to remit the required State contributions to any person or entity until it has received the required contributions from the State…
Well said Steve!!
Please consider our retirement welfare!!! SS just went up, are we going down? Please do not vote to put this through!!!
Maybe we should have more conversations around having Social Security benefits instead of TRS. Our elected officials continue to chip away at our pension and nothing is being done to permanently stop this from happening. Maybe this is because it is a Illinois issue and not federal. We may have more impact on officials if we were able to contact them all.
After 34 years of teaching I have worked hard to have my retirement set. With less that one year to retire, how can you just change what I have worked for all these years? Financially raising four children by myself and having three currently in college and one more going in one year, how can you mess with my money that I had all planned to help my kids? If you want to change things, you need to carry through with the originnal agreements to people and change it for the people who just started and were never effected by it in the first place.
What are you lawmakers thinking, really? Oppose SB-512! It is inconceivable to me that you would even consider this outrageous bill! How can you sleep at night? Our state is so stinking broke because of crooked governors and years of greed and still the greed continues. Is our pension that tempting, that you would be willing to steal our money? You have the opportunity to do what is right. You have the chance to let all the teachers in Illinois know what kind of man you really are. Do you have the guts to VOTE NO? This insane bill is a way to try to get by with yet another raping of our hard earned pension fund. This is such a sad, sad time to be a teacher, especially in Illinois. DO NOT SUPPORT THIS RIDICULOUS BILL. STAND UP AND DO WHAT IS RIGHT AND VOTE NO!
I wish to share a note I sent to Rep. Tom Cross, my state representative!
As you know, I voted for you, not Ty Fahner or the Commercial Club of Chicago! My message is simple: I cannot in good conscience offer my support at the polls when as a constituent my life long contributions to the pension system are being thrown under the bus in such an immoral way. The state enjoyed the windfall of our payments with no intention of even protecting the principle but using it as a personal slush fund. Now, the State wishes to cover up their corruption by saddling teachers with increased payments and reduced benefits. Teachers face the prospect of last year’s tax increase with a backdoor tax increase through higher pension contributions, yet we are portrayed as villains and freeloaders. I don’t have a million dollars or run a big company, but I know injustice when I see it. What hurt even more is the way teachers and my profession have been demonized in commercials, on WLS radio, and local stations WGN and FOX. I teach not only students but also my own sons and daughters about belief in our democracy. My family feels my utter despair, as they have been part of a teacher’s life in all ways. They see the system tilt toward the politically connected, and I say to them have faith. I implore you to resist the pressure from the wealthy elitists with class warfare designed to again penalize the middle class. We wait for our voice to be championed and our values to be affirmed as simply solid and decent. With no social security, my pension means everything to my wife and 7 children. With my wife and I and 5 voting age children, I hope we vote and influence others in our extended families to support leaders who share the simple vision of right and wrong on this issue.
Thank you for your service!
This is an outrageous plan! Teachers and districts have faithfully paid their portion of a retirement plan. The fact that the state has a fiscal crisis should NEVER effect the livlihood of those who have spent their careers dedicated to educating the youth of this state. What a shame that we even have to entertain the thought of legislators taking our future away from us. No social security, and now a plan to increase the rate we pay. Holy smokes! I don’t know about anyone else, but my district is certainly not offering increases in pay to help subsidize any increase in cost of living, certainly not in increases in pension rates. Vote this DOWN!!
Please vote this bill down. it will hurt a lot of people, myself included, in numerous ways. It is not ok to take our hard earned money. Use your own Pension plan, why don’t you?
Please! Please!, Please! Do not reduce our benefits or make us pay more to our retirement. I will be retiring in afew years and that is all I will have to live off of. I will have worked almost 40 years and have put my share into the system and now you want me to take less than I deserve. How are we to live, we do not get social security. Many of us live by ourselves and can not depend on someone else as a suppliment. That is our money and it it not right that you take it away from me or any of us. PLEASE VOTE THE BILL DOWN!
A quote from Darlene Senger’s ,(R) Naperville, website.
“I haven’t heard anyone else come in and save a dollar here,” she says. “Again, we could do this until we’re blue in the face. We sat and worked with a lot of you this summer but no one brought ideas to the table. So I’m voting yes.”
Dear Mrs. Senger,
I fail to understand why I, a teacher, should have to bring ideas to the table in order to solve a problem that
the state legislature has created. For 25 years you have taken money ,that should have gone into the pension
systems, and used it for other purposes. You did not ask us how to spend that money but now you want
our ideas on how to get out of this mess. You expect us to take ownership of a problem you created. Do the right
thing and work to fully fund your pension obligations without putting that burden on us.
It is obvious that Terry Savage of the Chicago Sun-Times knows absolutely nothing about teachers benefits. In her article 11/9, “Pension reform needed” she joins the her corporate counterparts in pitting herself against the teachers of Illinois; be it with flawed information-no less.
She states, “These three choices(teachers have) are simple-and more generous than the choices that were given to employees of major corporations,such as IBM…”
Well at the time IBM offered a choice of options to their employees to discontinue the pension plan as they knew it, those employees’ pensions were completely paid by IBM. The employees did not pay 9.75% of their income into their pensions-as Illinois teachers. In addition to IBM’s company paid pension, those same employees were also eligible for social security benefits-which they continue to be eligible for with the company’s 401K benefit plan.
Both advantages- the teachers of Illinois do not nor have ever had.
So when taking sides against the teachers of Illinois–and why we need to fall in line like corporate employees—these corporate supporters need to get their facts straight!
It’s bad enough the latest wave of teachers are actually being asked to teach til they are 67 if they want full retirement. My mother just retired from teaching after 34 years, and she was burned out at 32 years. Yes, our job is that much more important than the average 9 to 5 because we have to help the youth of tomorrow become responsible citizens of the world. Please, there is no reason your should do anything but Oppose SB-512! Our state is broke because of crooked governors and years of greed and still the greed continues. Is our pension that tempting, that you would be willing to steal our money? You have the opportunity to do what is right. DO NOT SUPPORT THIS RIDICULOUS BILL. STAND UP AND DO WHAT IS RIGHT AND VOTE NO!
I have encouraged every person I can to call and email their legislators, but some teachers still don’t seem to understand what is at stake. Quite a few teachers that I spoke with flat out told me they didn’t have time to “deal with this.” It is extremely important that we all take the time not only to contact legislators ourselves, but to work our hardest to get our colleagues to understand that five minutes of their time can be worth thousands of dollars over the coming years.
I’ve also heard that there are no alternative plans being offered and that making teachers pay for something that isn’t their fault is the only way to “save Illinois.” Baloney and baloney. Perhaps when we make our calls and send our emails we should also offer some suggestions for fixing the problem.
One suggestion might be to ask the civic committee members to contribute some of their wealth toward our state’s budget to help “save” it. I mean, this shouldn’t be much to ask of a group whose only goal is to help the state.
Another idea might be to take a look at reforming legislators’ salaries and pensions in order to help set off some of the costs. Perhaps they can even throw some money in a jar every time they break a promise. We’d have a budget surplus in no time.
Maybe having every teacher start to contrubute the eventual 15.77% starting now instead of later, but giving them each one lump sum payment of one million dollars after a certain amount of years of service would solve the problem. It would help make projecting future costs easier, and I’d be more than happy taking one million dollars all at once instead of $46,000 or so each year over the last 20 to 30 years of my life.
I know it’s a novel ideas, but raising the taxes on Illinois’ wealthiest citizens might also help “save” Illinois. When they complain that it’s not their fault that we are in this mess, we can sympathetically agree, and then ask them to kindly pay up anyway.
The point is, SB512 isn’t the answer, and no matter how many times it is ammended, it never will be. That is unless it’s used on Jeaopardy one day as the answer to the clue “This unpopular bill used teachers as scapegoats in order to solve a problem they had no part in creating.” Even then, SB512 will still need to be stated in the form of a question–quite fitting, since there are so many unanswered questions surrounding this bill already.
Excellent thoughtful post! There are many solutions on the table but the people “serving” in Springfield refuse to hear them.
First and foremost – Illinois should have a progressive income tax instead of the horribly regressive and punitive system we have now.
Second – stop playing chicken with these corporations. Every day there is a new story of some corporate behemoth threatening to leave the state if we don’t bend over backwards to subsidize their profit-making. Just say NO! If these people want to pick up and leave then I say let them. They are bleeding us dry with the constant subsidies, TIF districts, public-private partnerships etc.
Vote this bill down. I am retired but I have three daughters who are active teachers. When I taught I was considered the working poor with a Master’s degree. I loved my job. I had to work many other jobs to make ends meet. I earned social security points, but receive just a portion of the money I would get if I did not have a teachers pension. I also do not qualify for any of my husbands Social security now or if he should die because I have a teachers pension. Most teachers have to work a second job. (. Now the lady down the street who worked part time her whole life because her husband made alot of money is eligible to receive half of her husbands social security and receive at least half of his benefits should he die.) It is beyond me how you can make the under paid teachers pay more for their retirement than they have already paid. You mishandled this money. Teachers are not freeloaders they pay for their pensions and your wives.
I wonder if the additional session day was added because members of the Civic Committee couldn’t get additional campaign contributions wired from Switzerland in time.
I have no confidence in elected officials. Illinois is the most corrupt state in America. What I do have confidence in is the fact that I’ve worked hard for 23 years in education and contributed to my own retirement fund. People who don’t teach have no clue as to what’s involved on a daily basis. I’d like to see how long these crooks would last in the classroom. VOTE NO to SB512!!
Our members need to realize hat WEP…the Windfal Elimination Act that keeps teachers in Illinois and a dozen other state from paticipating in Social Secuirty….and allows those who pay into it through summer jbs or previous emplyment….will NEVER be repealed. At last estimate it would cost over $80 BILLION to “fix” I don’t care how well our economy rebounds…no one is going to spend that kind of money…especially on teachers.
Therefor it makes it all the more important that we protect what we have. It is up to each local leader and those of us who “get it” to make sure all of our members know what is at stake.
The amended version of SB-512 is no better than the original version, and I think our representatives need to be put on notice: “you vote yes, I vote for someone else!”. That should be the last thought you leave your representative with; the preceding thoughts should include the questionable constitutionality of the bill, the broken promises made by the legislators in the past to pay their fair share of the pension plan, the damage to public education in the future due to the unfairness of a three tier system. The Pension Holiday (2002) was supposed to “fix” our pension system; now our representatives are going to “fix” it again? Please, for the sake of public education and the hard working folks who help our young people, contact your representative immediately and state in strong terms your opposition to this piece of legislation. Leave our pension system alone!