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Old 04-21-2012, 02:59 PM   #21
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Note, that's only for the Chicago Public Schools not the rest of the public teachers in the state.
I stand corrected. Thank you.
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Old 04-21-2012, 03:04 PM   #22
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Originally Posted by Chuckanut

Thanks for the information. I did not realize it was that complex. And I had forgotten about not having to contribute to SS - something which I do.

I think I will 'withdraw' my comments and yield to those who are more knowledgable.
Before I go any further, I must fully disclose I only know enough to be dangerous, as they say
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Old 04-21-2012, 03:17 PM   #23
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I fairly impressed those are significant changes to the system. Moving the retirement age to 67 and capping and deferring the COLA are roughly 20% increases in the pensions financial health. A system with 2.2% multiplier needs a combined contribution (state + employee) of between 25-30% so increasing the contribution to by 3% is another ~10% increase. All and all I think the plan would be about 50% better funded than current system.

Still I am surprised that no sacrifice was asked of current retirees. Why not make the COLA provision apply to everybody working or retired?
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Old 04-21-2012, 03:18 PM   #24
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Before I go any further, I must fully disclose I only know enough to be dangerous, as they say
As noted by Chuckanut, yourself and others, the situation in Illinois is complicated. The main issues are differences between the way the Chicago programs are handled vs the rest of the state and secondarily the difference between teachers (TRS) and other public employees. It's easy to lump the whole thing together but in actuality there are significant differences in the plans.

The one thing they all have in common is questionable funding and a current shakey financial status. The exception may be the municipal pension fund (we have a board member who belongs and may comment) which seems to be in OK shape.

The information I provided in an earlier post uses a recently received email from TRS (Teacher Retirement System) as its basis. Retired Chicago teachers, city workers and State of Illinois workers may have different circumstances.
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Old 04-21-2012, 03:22 PM   #25
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Why not make the COLA provision apply to everybody working or retired?
Because that would reduce discretionary spending at the youbet household. Totally unacceptable. Shut your mouth please.......

Other folks might point out that imposing the COLA changes on current retirees would achieve a small financial benefit to the system at the HUGE political cost of stirring up massive opposition from an army of cranky, retired school marms itchin' to kick a certain govenor's butt. That is, a small benefit for much pain. Think Madison, Wis, 2011.
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Old 04-21-2012, 03:22 PM   #26
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I am also surprised that state aren't taking these opportunities to move their employees into Social Security. It seems to me that SS should act as universal safety net. If a state like IL or CA continue to be economic basket cases and need to cut pension for current workers like we are seeing Europe pension, state retirees aren't completely hosed.
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Old 04-21-2012, 03:25 PM   #27
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I fairly impressed those are significant changes to the system. Moving the retirement age to 67 and capping and deferring the COLA are roughly 20% increases in the pensions financial health. A system with 2.2% multiplier needs a combined contribution (state + employee) of between 25-30% so increasing the contribution to by 3% is another ~10% increase. All and all I think the plan would be about 50% better funded than current system.

Still I am surprised that no sacrifice was asked of current retirees. Why not make the COLA provision apply to everybody working or retired?
Our system imposed a shared sacrifice. The contribution rates when up for the current workers, while the COLA got capped at 2% instead of yearly CPI rate for existing retirees.
YOUBET- I always thought it was strange a state would have 2 different pension systems for state teachers. MO has the exact same thing. KC and STL have their own which involves SS, but the out state has their own with no SS contributions.
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Old 04-21-2012, 03:27 PM   #28
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Because that would reduce discretionary spending at the youbet household. Totally unacceptable. Shut your mouth please.......

It goes without saying that any proposal I make shouldn't possibly impact all of my friends on the ER board . I'll happily contribute $50 so that you can bribe your local legislator for the ER board exemption to be added to the governor proposal.
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Old 04-21-2012, 03:44 PM   #29
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I am also surprised that state aren't taking these opportunities to move their employees into Social Security. It seems to me that SS should act as universal safety net. If a state like IL or CA continue to be economic basket cases and need to cut pension for current workers like we are seeing Europe pension, state retirees aren't completely hosed.
The discussion I've heard involves the ability of the school districts to come up with the 6%+ contribution they would have to make to SS. I hear mixed feelings from teachers. Many would just as soon belong to SS, especially once they understand WEP and GPO.

Here at the youbet household, everything else being equal, we would just as soon have had DW paying into SS (with her employer paying the employer share) as not. I'm sure there are others that feel differently.
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Old 04-21-2012, 03:49 PM   #30
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Gov Quinn announced on 4/20 long overdue pension reform. Current employees would see an increase in their pension contributions by 3%, retirement age increased to 67 over a period of time, COLA tied to 3% or half of CPI whichever is less and an end to free health care. Subsidy would be offered to help with health care. Current retirees would not be part of the equation. Pensions would be fully funded by 2042. Finally some leadership in Illinois. Would anybody like to comment on these state of affairs?
When the state decided to declare a pension payment holiday in 2005, despite the fact the pension fund at the time was only 60% funded, Rep. Elaine Nekritz was one of the ones leading the charge in favor of the payment holiday against opposition in order to use the pension money on other spending needs. The Illinois Commission of Government Forecasting and Accountability reported that 44% of the shortfall is due to the government not paying in the past what they were legally required to do. 22% is due to poor investment returns. The teachers paid 100% of their obligation

Now Elaine Nekritz is one of the leading people in charge for Gov Quinn for pension reform. What Illinois is trying to do is not to ensure pension benefits are provided, it is to cut the amount of contributions they are going to make. One of Elaine Nekritz's pension solution ideas is to make all contributions to the pension for government a "local" and not a state responsibility. Another provision not announced is Quinn looking to change the law for the pension funding to 80% over time instead of the present rule of 90%. so none of this is designed with any concern over the pensions but rather increasing the percentage of state money that can be spent with contractors who can contribute to local campaigns, long an Illinois specialty.

Today the pension pays a 3% annual increase every year to approximate long term inflation and yet provide an easy way for pension administrators to plan for expense. Changing this provision to no calculation for 5 years will mean for sure by 5th year of retirement the pension will be 16% less than present and are patently unfair.

Additionally, the salary expense the pension is valid for is 2.5 billion per month or 30 Billion per year. the present funding is 5.3 Billion or less than 2% of salaries. If the state of Illinois was private employer it couldn't come close to paying it's share of Social Security

http://sunshinereview.org/index.php/...loyee_salaries
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Old 04-21-2012, 03:49 PM   #31
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Still I am surprised that no sacrifice was asked of current retirees. Why not make the COLA provision apply to everybody working or retired?
It would take an IL Constitutional amendment, which would be tough. Some people are trying to interpret that as no changes to pensions period, not just to retro-active changes, but I think they'll get shut down.


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SECTION 5. PENSION AND RETIREMENT RIGHTS
Membership in any pension or retirement system of the
State, any unit of local government or school district, or
any agency or instrumentality thereof, shall be an
enforceable contractual relationship, the benefits of which
shall not be diminished or impaired.

(Source: Illinois Constitution.)
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Old 04-21-2012, 03:52 PM   #32
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These public pensions have been out of control for way too long. The structure of contract "negotiations" is ridiculous with some politician wanting to get elected giving away the store and then years later they're out of office probably collecting the same bloated benefits at taxpayer's expense. Real guts would be to go to 401k's with the match only given when times are good, just like the private sector. To make matters even worse, dead weight is throughout all of government. What other entity considers a slowdown in the INCREASE of spending a cut? This whole area is set to burst just like the out of control housing market did, especially if future market returns are below average.
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Old 04-21-2012, 03:55 PM   #33
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As noted by Chuckanut, yourself and others, the situation in Illinois is complicated. The main issues are differences between the way the Chicago programs are handled vs the rest of the state and secondarily the difference between teachers (TRS) and other public employees. It's easy to lump the whole thing together but in actuality there are significant differences in the plans.

The one thing they all have in common is questionable funding and a current shakey financial status. The exception may be the municipal pension fund (we have a board member who belongs and may comment) which seems to be in OK shape.

The information I provided in an earlier post uses a recently received email from TRS (Teacher Retirement System) as its basis. Retired Chicago teachers, city workers and State of Illinois workers may have different circumstances.
I believe the Municipal (Chicago) will follow suit.
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Old 04-21-2012, 03:56 PM   #34
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It goes without saying that any proposal I make shouldn't possibly impact all of my friends on the ER board . I'll happily contribute $50 so that you can bribe your local legislator for the ER board exemption to be added to the governor proposal.
I appreciate the thought...... But I'm not sure $50 would do it these days.

It's been a long time since I and my cousins were kids doing errands and jobs for the Ward Committeeman and Precinct Captain. My dad, his brother and his sister's hubby all worked for the city. We kids used to do things like pass out packs of cigarettes (with voting instructions attached) outside polling places to keep our dads' jobs secure. We never lost an election and our dads collected City of Chicago pensions until the day they died.

But that was a long time ago and $50 doesn't go far now........ I'll stop there since we don't want this thread to go political.......
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Old 04-21-2012, 03:56 PM   #35
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Here at the youbet household, everything else being equal, we would just as soon have had DW paying into SS (with her employer paying the employer share) as not. I'm sure there are others that feel differently.
+1 I won't offer any more thoughts on the different systems. I have eaten plenty of humble pie already today.

But, I will say that, IMHO, diversification of retirement income sources is important. Having three sourcers - personal money, pension and SS - is better than having only two - personal money and a pension. Again, my 2 cents. Others may disagree.
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Old 04-21-2012, 04:02 PM   #36
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It would take an IL Constitutional amendment, which would be tough. Some people are trying to interpret that as no changes to pensions period, not just to retro-active changes, but I think they'll get shut down.




-ERD50

I heard a several constitutional law professors argue about this with respect to California similar laws. The interesting question is what happens when the state constitutions mandates that spends A$ on the schools B$ on pensions, C$ clean water conservation and $D on anti-smoking education (paid by the tobacco settlement) but the state doesn't even have enough for A+B.

I guess a simpler solution would be simply tax pensions.
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Old 04-21-2012, 04:03 PM   #37
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Because that would reduce discretionary spending at the youbet household. Totally unacceptable. Shut your mouth please.......

Other folks might point out that imposing the COLA changes on current retirees would achieve a small financial benefit to the system at the HUGE political cost of stirring up massive opposition from an army of cranky, retired school marms itchin' to kick a certain govenor's butt. That is, a small benefit for much pain. Think Madison, Wis, 2011.
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Old 04-21-2012, 04:05 PM   #38
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I fairly impressed those are significant changes to the system. Moving the retirement age to 67 and capping and deferring the COLA are roughly 20% increases in the pensions financial health. A system with 2.2% multiplier needs a combined contribution (state + employee) of between 25-30% so increasing the contribution to by 3% is another ~10% increase. All and all I think the plan would be about 50% better funded than current system.

Still I am surprised that no sacrifice was asked of current retirees. Why not make the COLA provision apply to everybody working or retired?
Are you retired? Do you get a pension? How about they reduce your income.
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Old 04-21-2012, 04:16 PM   #39
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Originally Posted by youbet
Because that would reduce discretionary spending at the youbet household. Totally unacceptable. Shut your mouth please.......

Other folks might point out that imposing the COLA changes on current retirees would achieve a small financial benefit to the system at the HUGE political cost of stirring up massive opposition from an army of cranky, retired school marms itchin' to kick a certain govenor's butt. That is, a small benefit for much pain. Think Madison, Wis, 2011.

That comment is hilarious but true! Just this week our local legislature got blindslided by 100 retired teachers who were hearing rumors that the legislature was going to take away the authority of the pension system overseer, at a local chat session. I am a pensioner of the system also, but I actually felt sorry for the guy as he was attacked by a swarm of retiree bees over something that wasnt even his doing or even totally accurate. The power of the internet, an organization misleading facts, and an army of vigorous retired teachers young enough to be no where near wheelchair status and having plenty of free time would be enough to keep me out of politics!
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Old 04-21-2012, 04:24 PM   #40
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Are you retired? Do you get a pension? How about they reduce your income.
Yup being retired for a long time. Pension nope. Hawaii doesn't tax pension either nor employer contribution to 401K, so withdrawal from one of my IRA is exempt from Hawaii taxes.

I'd happily give up this perk, to help solve the state looming pension crisis, the state pension system is the bottom 10 for funding. I think sacrifices for digging states out of their fiscal mess needed to spread widely, not just foisted on future retirees and taxpayers.
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