Playing pension politics (updated)

Politicians are being pressured to play politics with your pension.

Last spring, after IEA members helped defeat proposals to reduce pension benefits to current and future members of the state pension systems, it was decided that the state’s pension policies should be thoroughly reviewed.  The idea was to study the pension systems and develop recommendations regarding state pension policy.

A task force comprised of legislators, representatives from IEA, IFT and other unions representing state and university employees, annuitants of the state-funded retirement systems, business lobbyists and others was assembled.

The business lobbyists had their hearts set on ramming through recommendations for pension benefit cuts.  They expected their usual tactic – repeating the unsubstantiated claim that Illinois pensions are way too generous and expensive – would win the day.

But there was a plan by labor to head off the attack.  A plan so “out of the box” that the business people never saw it coming.

Here was the plan:  Stick to the facts about pensions.

The labor representatives organized around reality, compiling a report that rejected rhetoric in favor of information supported by data, such as:

• The cost to taxpayers of state-funded pension benefits is less than the private sector, and less than public pensions in neighboring states;
• The level of benefits when compared to 85 public employee retirement systems nationwide are average
• Seventy-eight percent (78%) of the funds’ beneficiaries do not receive Social Security, meaning their pension is their sole source of retirement income
• Changes or cuts to future benefits will not reduce the state’s debt for past benefits already earned (the “unfunded liability”), nor lower required pension payments in the near term;
• The primary cause of that debt is the state’s “decades-long failure to make its full employer contribution,” even as participants continue to pay their own very significant share;

The truth about pensions set off a tantrum by the Chicago Tribune’s editorial board, which had been poised to applaud the calls from the business representatives for, among other things, increasing the retirement age for workers, cutting cost of living adjustments, increasing worker contributions and switching to a “defined contribution” retirement system, like a 401K.

By forcing a fact-based report, labor had messed up business’ master plan, making the TRIB very sad.

In a swift vote, though, the task force’s labor sympathizers nixed all of that. In their view, the pension crisis has one root cause: Lawmakers haven’t fully funded the system. In other words, taxpayers haven’t put up enough money to pay all the benefits. The sheer size of those benefits? No problem there.

This labor-backed version of task force “findings” on benefits dismisses a two-tier system as incapable of producing “significant savings” for some 25-30 years. Oh really?

The day after the editorial appeared, a strange thing happened.  When the task force convened, some surprising votes were cast**, allowing the business people to block the submission of the fact-based task force report to the governor and lawmakers as an official report of the group.

So, after months of meetings, what we ended up with was a task force that  studied the pension issues, amassed a series of facts and then decided not to submit them to the policymakers as the official report, though the material will be forwarded informally to the governor and legislature..

That smell?  Why, that’s Illinois politics!

So, what does this mean?

It means you ought to check the IEA Website regularly for news updates on pensions and other important issues.

And you probably should become a fan of IEA on facebook so you will receive all the breaking news delivered to your desktop.

And it means some clarifying questions should probably be asked at the candidate recommendation meetings that IPACE will be holding over the next few months.

If politicians are going to be pressured on pensions, at least some of the pressure ought to come from people who don’t get social security, who pay a significant portion of the cost of their retirement and to whom the pensions are paid.

Clarification

**The original version of this article stated correctly that “the proxy vote cast on behalf of Sen. Jeff Schoenberg provided the support” needed to defeat adoption of the report.  Sen. Schoenberg has been out of the country and has not been reachable, so it is unclear whether the vote that was cast on his behalf reflected Schoenberg’s will.