January 08, 2013 07:52 PM UTC

Illinois Unions Kill Attempt to Breach Pension COLA Contracts.

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• by: PolDancer

In 2013, Illinois public sector unions banded together and prevented governmental and corporate attempts to breach public pension contracts and steal earned public pension benefits.  Incredibly, in 2010, Colorado public sector

unions actually supported the theft of earned pension benefits from their retired members . . . Colorado PERA retirees.  

In 2013, Illinois public sector union members have fought off an attempt by the State of Illinois to push its debt problem onto the backs of public employees.  Contrast this success with the behavior of Colorado public sector unions.  In 2010, Colorado public sector unions kicked their retired union brothers and sisters in the teeth.

http://www.ilretirementsecurit…

A record of the treachery of Colorado public sector unions exists on the Colorado PERA website:

“In Colorado, Senate Bill 1 passed with the support of the Colorado Coalition for Retirement Security, which brought together Friends of PERA (which includes PERA members and retirees), the Colorado Education Association, the Colorado School and Public Employees Retirement Association, AFSCME Colorado, the American Federation of Teachers Colorado, the Association of Colorado State Patrol Professionals, the Colorado Association of School Executives, and Colorado WINS.”

http://www.copera.org/pera/abo…

In 2010, Colorado PERA argued that it had persuaded some PERA retirees that their pension contracts should be breached.  For perspective, here is the testimony of one PERA member to the Colorado PERA Board of Trustees at a PERA “Listening Tour” meeting in 2009:

Sue Ellen Quam in 2009:

“I was a legislative liaison for many, many years.  I sat in the Joint Budget Committee for many, many years, and I remember legislators saying ‘You know, you don’t get very good salary increases and your benefits really stink, but you’re gonna get a really good retirement and so just hang in there.”

“So, I find it to be discouraging that the Legislature may be considering saying, ‘We got you on your salary, we got you on your benefits, and now we’re going to get you on your retirement.”

“I’ve heard rumors that the 3.5 percent increase may be reduced or eliminated and that it’s OK with PERA members.  It’s not OK with this PERA member.”

Here are a few news accounts of the battle to protect public pension contracts in Illinois:

From the Sun Times:

“Unions lined up to fight the package, arguing that it would not stand up in court because of constitutional protections against the impairment or diminishment of government pensions.  But their criticism didn’t stop it from reaching the floor.”

“‘While there’s truth to the statement the Constitution is not a suicide pact, what we have here is an all-out assault on employees,’ said John Stevens, a lawyer for the We Are One Illinois labor coalition, which opposes the pension deal.”

“The head of the Illinois Federation of Teachers, Dan Montgomery, called the language in the pension bill ‘illegal.'”

“‘You’re considering plunging ahead with an illegal plan from our point of view that we would propose violates your oath of office, does not solve state’s fiscal or pension crisis and disrespects hundreds and thousands of public servants,’ Montgomery told the panel.”

(My comment:  In 2010, a majority of the members of the Colorado General Assembly demonstrated that they placed little value on their oaths of office or on the Colorado Constitution.  Their honor and morality was sold on the cheap for political expediency.)

“There also have been doubts that Cullerton would allow a Senate vote on the House plan, which would string supporters out on a roll call that labor unions have fought bitterly against because it would freeze cost-of-living increases for state retirees for six years, among other things.”

“Under the 175-page House bill, known as Senate Bill 1673, cost-of-living increases would be frozen for six years and disallowed for retirees until they reach 67.”

http://www.suntimes.com/174466…

From evanstonnow.com:

“Illinois Federation of Teachers’ chief Dan Montgomery accused lawmakers of ‘plunging ahead with an illegal plan that, from our point of view, violates your oath of office.'”

“Illinois AFSCME boss Henry Bayer told lawmakers they are trying to take away what has been ‘earned and is owed’ to public employees.”

“Illinois’ largest public employee unions – the Illinois Federation of Teachers, the Illinois Education Association, the American Federation of State, County and Municipal Employees and the Service Employees International Union – are warning lawmakers that any reform to which the unions do not agree would be met with a lawsuit. Illinois’ constitution specifically protects public pensions.”

“Instead of benefit reductions, the unions want lawmakers to raise taxes on corporations to pay for Illinois’ $93 billion to $130 billion pension gap.”

“‘We don’t have a benefit problem,’ said Cinda Klickna of the IEA. ‘We have a revenue problem.'”

“Illinois’ pension woes go back years and can be partially blamed on lawmakers and governors who did not make the state’s full pension payment.”

(My comment: As we know, the Colorado General

Assembly has skipped $4.3 billion in annual required pension contributions in just the last decade.)

http://evanstonnow.com/story/g…

From Pensions and Investments:

“Representatives of organized labor testified against the proposal. ‘It’s a desperate Hail Mary pass,’ said Michael Carrigan, president of Illinois AFL-CIO, which represents almost 900,000 union members in the state, according to its website.”

http://www.pionline.com/articl…

From We Are One Illinois and the Illinois Federation of Teachers:

“Leaders of the We Are One Illinois coalition released studies today to shed light on the devastating, unfair, and unconstitutional pension cuts in the “Quinn plan” (embodied in HB 1447) and to detail the group’s recommendations to address Illinois’ fiscal dilemma.

Among the key findings of the coalition’s analysis on pension benefit cuts:

–  Employees who ‘choose’ the diminished cost-of-living adjustment (COLA) under the Quinn plan would forfeit one-third of their inflation-adjusted purchasing power over the first twenty years of their retirement.

–  Because, by design, the diminished COLA is sure to lag inflation, income replacement rates in retirement would fall to 40% to 60% of final pay after twenty years of retirement under the Quinn plan. (Experts recommend income replacement rates of 85% to maintain living standards.)

–  When compared to Social Security’s fully inflation-indexed system, the Quinn plan’s COLA would leave retirees with a monthly check that is 25% less than an annuity adjusted according to Social Security.

The second study presents the coalition’s way forward to address the state’s fiscal issues, which includes shared sacrifice from public employees. The framework recommendations would:

–  codify an ironclad guarantee that compels the state to make actuarially-sound pension payments

–  with a guarantee in place, ask employees to gradually pay 2% more of their salaries into their pensions

–  close approximately $2 billion in corporate tax loopholes to provide revenue to support critical services and operations, so that the state stops borrowing from its pension systems to pay its operating expenses

http://www.ift-aft.org/news/pr…

From the Illinois Federation of Teachers:

–  OPPOSE SB 1673 and any legislation that would cut the retirement benefits the state promised to current and future public employee retirees.

–  WORK WITH unions in the We Are One Illinois coalition to find a fair and constitutional solution.

–  SUPPORT revenue-generating solutions to the pension crisis like those recommended by the coalition, not cuts that would hurt dedicated public servants who have paid their fair share into the systems.

–  OPPOSE all attempts to rush through unconstitutional, unfair legislation without following the appropriate, democratic process.

http://www.ift-

aft.org/legislative/legislativeupdate/13-01-08/Lawmakers_%e2%80%9cPunt%e2%80%9d_Once_Again_on_Pensions.aspx