I was just pointing out in this thread, the politicians are not the only ones at fault. Often they are the sole target for the under funding issue, but it seems they had assistance.
No. The then gov did not have much assistance. It's hard to not give Blagojevich the majority of the credit for the 2005 "pension holiday." He openly takes full credit. A creative mind can imagine some non-political hero who could and should have jumped in and stopped him, and there are records of speeches in the Springfield house of folks trying to do so (see my post mentioning Chicago Magazine). But when the buck passing begins and ends at the gov's desk, it's hard to get too excited about and place blame on the little guys who screamed but not loud enough and were run over by Da Machine.
If you're inferring I'm taking some pleasure from this, you are mistaken.
Really?
I know there's been talk, just like with SS, that adjustments will need to be made to assure that something is there for everyone.
There's been more than talk, just no agreements. Have you read the legislation that's been introduced in one or the other of the houses in Springfield? It's been all over the media and is readily available for your review.
I'd sure like to see some proposals on the table and getting exposure and healthy debate.
Have you read the legislation that's been introduced in one or the other of the houses in Springfield? It's been all over the media and is readily available for your review.
Most of the proposals (via introduced legislation) so far share these elements:
1. Employees contribute larger percentages of their salary.
2. New hires, existing employees and retirees all take cuts to both already earned credits and to future credits. One proposal for retirees does offer the option of continuing the current pension level but they loose subsidized retiree medical coverage. So, for example, a retiree might chose to give up retiree health insurance and go with ACA in lieu of taking the pension cut. This was designed to provide a "choice" and avoid the change seeming to be a diminishment of their pension which is prohibited in the state constitution. I thought this was clever. The state saves by either reducing the retiree's pension or by no longer providing subsidized health insurance. (Subsidized health insurance is not protected in the constitution.)
3. Lots of misc rule changes to eliminate spiking and other abuses.
4. The state's contributions remain non-mandatory and the unions continue to be prohibited from suing if the state fails to contribute.
5. The state's contributions, if and when made, continue to be determined by political calculation rather than actuarial calculation.
I have no problem with #1, #2 or #3. But #4 and #5 just seem stupid. We reduce pension costs by reducing the value of retirement benefits earned in the future and the already earned retirement credits of current employees and retirees but then leave the door open for a future governor (Blagojevich-2 ?) to continue the practice of "pension holidays?" What's the point of that?
I do think part of the solution is to put state employees into the SS system. Then they will at least know that their 6% SS contribution is being matched dollar for dollar by the employer. And the Feds could step in with the handcuffs when Illinois decides to take a "SS holiday." SS + a 3% 401k/403b match could look mighty, mighty sweet to a new State of Illinois employee right now.
I think the state could also win a lot of good will if they offered preferential treatment in hiring back past employees who retired in the last few years and who find themselves in a strained financial situation if cuts to retiree pensions turn out to be more than superficial. With teachers, this could be done by modifying the rules on double dipping to allow going back and working part time in the same school or system they retired from. Actually, that could work for any employee.
