Colorado Unions: A Swift Kick in the Teeth for Our Retired Brethren.

Illinois public sector unions are aggressively defending all public employee contractual rights in their state.

On the other hand, when they had the opportunity, Colorado public sector unions kicked their retired union brothers and sisters “squarely in the teeth.”

From the Illinois public pension reform debate:

Illinois retiree Calloway:

“‘We worked hard all those years. I mean, we worked. And then we retire. We did what we were supposed to do, and now they want to take our money from us,’ said Calloway, who believes a tax increase is perhaps the most viable option for the state to address the problem.”

“‘I cared for mentally retarded patients. Some had little or no family contact,’ Calloway told the Sun-Times, recalling the grueling and physically challenging conditions she faced.”

Illinois retiree Halvorson:

“I don’t think it’s right that people who put away money for years and years and years and had it misappropriated by other people . . . don’t get what we earned,” she said.

“I get the fiscal condition the state is in. I just don’t think it should be our money that helps dig us out of it.”

(My comment: Colorado’s 2010 legislation [SB 10-001] includes provisions to break the contracts of Colorado PERA retirees. This is an attempt to force a small group of Coloradans to pick up the state’s contracted debt.)

Illinois public sector retirees recently defended their rights to their contracted pension COLA benefits in a Sun-Times article:

“All retirees on fixed government pensions, they each worry about how their seemingly once-secure retirements could change for the worse if Gov. Pat Quinn and lawmakers return to Springfield in early January and gut pension benefits for ex-public employees.”

“[Retiree] Calloway, 73, was a caretaker for the developmentally disabled in a state home. Paprocki, 69, is a long-time, former campus cop at Northeastern Illinois University, and Halvorson, 66, is a former grade school teacher in Evanston.”

Former Illinois Governor Jim Edgar defends public pension contracts:

“The former two-term Republican governor, a traditional ally of business interests when he oversaw state government in the 1990s, went so far as to deliver a tongue-lashing recently to some of the business leaders who have been the most strident in pushing for pension cuts.”

“‘I’ve told some of the CEOs in Chicago who are all for this, Hey, I worked in state government. We never had profit-sharing. We never had stock options. We never had bonuses. All we really had was our retirement,’ Edgar said. ‘I think people in the private sector don’t understand there were some limitations in the public sector they didn’t have. And they ought to be a little more understanding and not maybe quite as harsh on some state workers as they’ve been.’”

Illinois public sector unions are defending retiree contracted COLA benefits (unlike Colorado public sector union administrators and lobbyists who, in 2010, supported the breach of their retired union member’s contracts.)

“But with strong pushback by a united front of public-employee unions, the votes don’t appear to be there yet for the kind of drastic pension overhaul that Quinn envisions and that would strip retirees of existing benefits and invite a certain constitutional challenge that the Illinois Supreme Court ultimately would be left to decide.”

Like Colorado, Illinois has skipped out on its public pension bills in the last decade:

“But beginning in 2002, the state borrowed to meet those commitments or passed laws to effectively underpay what the true annual pension costs were – in some cases, by as much as two-thirds. In fact, between 2002 and 2011, the state only once paid what truly was necessary on an actuarial basis and, in that single instance in 2003, it came from an infusion of borrowed dollars, state records show.”

“While Illinois’ pension systems routinely were funded at rates of 39 percent and less during the 1940s and 1950s, the scope of the problem now translates to this: The pension debt owed by every man, woman and child in Illinois stands at $7,373.

(My comment: The taxpayer’s “public pension debt” mentioned in this article is simply payment for services [to be made over the next 40 to 60 years] that the public has received in the past. Payment of this debt is a fraction of all taxpayer responsibilities for public services that will be provided in these coming decades.

A 2006 Federal Reserve paper, by Ronald A Wirtz, notes that public pension funded ratios in the 50 to 60 percent range were typical in the 1970s, and yet public pension contracts were upheld:

“From a long-term perspective, however, one can’t really pin too much of the pension problem on the recent stock market pullback-in fact, it’s [the stock market in recent decades] been a savior for most pensions. Rewind 50 years, and almost all pension assets were invested in U.S. bonds and other fixed-income sorts of securities. Though comparatively safe in terms of protecting assets, such a portfolio could not generate the returns necessary for pension funds to keep up with the benefits promised by generous government employers. During the 1970s, funding ratios generally hovered between 50 and 60 percent.” If the rule of law in the United States somehow survived the low funded ratios of public pension plans in the last century, I believe that we can also make it through this century without breaching public pension contracts.)

Back to the Sun-Times article:

“The state doesn’t have the option of somehow writing off that debt the way someone with a crushing array of credit card balances could in declaring bankruptcy. And its ability to target existing retirees hasn’t been tested in court because the state’s Constitution establishes a government pension as ‘an enforceable contractual relationship’ that cannot be ‘diminished or impaired.’”

“But none of the steps aimed at longtime workers or retirees has passed both legislative chambers in the face of aggressive union opposition, the serious constitutional questions and bickering between Republicans and Democrats.”

“Last week, a public-employee union coalition known as We Are One Illinois came up with its own plan that it said would save $10 billion over 30 years by having state workers and downstate and suburban teachers contribute another 2 percent of their paychecks toward their pensions.”

“In exchange, they (Illinois public sector unions) want an ironclad guarantee that the state won’t skip or skimp on annual pension payments.”

(My comment: Colorado public sector unions looked first to breach the contracts of their retired union brothers and sisters . . . people who worked at their side for many years. Illinois public sector unions are fighting for all public pension rights, including those of their retired members. This act of treachery by Colorado public sector unions in 2010 is unparalleled in the history of the United States labor movement. How is it possible that public sector unions in the United States tolerate this type of treacherous behavior in their midst? How is it possible that such behavior may be rationalized or justified? I cannot explain it.)

Full article:

http://newssun.suntimes.com/ne…

Algernon Moncrief

About Algernon Moncrief

Independent Nationwide Public Pension Rights Blogger.

One Community Comment, Facebook Comments

  1. toobadsosad999 says:

    Al, please look at this article on the PERA website.

    Colorado PERA Plays a Major Role in the $590 Million Settlement of the Citigroup Subprime Lawsuit

    http://www.copera.org/pera/abo

    The institutional investors, the pension managers don’t realize that this is just the tip of the iceberg.  All pensions throughout the country are not only at risk they are doomed.  And no one is facing the music.  The pension managers are conflicted and work for the banks not the pensioners.  Until you and others realize that it is the banks that have taken the pension money they will not recover.  Pensioners need to damand independent reviews of the pension funds and what they are invested in and start to think out of the box.  They should immedicately stop investing in mortgage-backed securities and invest in people and small businesses.  

    The banks have pensioners hoodwinked, it’s time to wake up and smell the coffee.  

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