Rutherford: Pension plan could happen by autumn

Rutherford: Pension plan could happen by autumn

CHAMPAIGN — Illinois State Treasurer Dan Rutherford said he was cautiously optimistic the state could come up with a plan for pension reform, perhaps even by elections this fall.

Speaking before the Champaign West Rotary at the Round Barn Banquet Center on Wednesday, Rutherford said "the biggest issue we need to face ... bar none ... is the state public pension system."

Rutherford, a Republican elected to the treasurer's office in November 2010, began his current term in January 2011. Ever since he took office, he said, he's been using the microphone at local meetings across the state to deliver the message that the "most fundamental problem" of the state is its unfunded pension liabilities. And reform can be in sight.

"It can be done if the political will is there," Rutherford said. "The public employee unions have strong influence on the General Assembly ... and members are a little goosey right now," he said.

The General Assembly wrapped up its regular session a few weeks ago without passing any major pension reforms.

In Rutherford's opinion, "the wheels came off" when the debate focused on whether or not local school districts, outside of the Chicago Public Schools, should start paying the employer's share of teacher pensions. (In Chicago, that already happens.)

When asked if part of the expenses should be shifted to local schools, as proposed earlier this spring, Rutherford said if that piece was going to be debated, then "put it all on the table," such as how special education funding, transportation and other funding is distributed between Chicago and downstate Illinois. "I don't believe those are equitable either," he said.

"The government has got to do what's right," he said. In the end, any reforms to the pension system must be fair to current retirees, current employees already in the system and those who will be in the system, Rutherford said.

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Sid Saltfork wrote on June 14, 2012 at 10:06 am

"any reforms to the pension system must be fair..."   Why is it that state politicians, and the media avoid stating that the pension systems are underfunded because the employer, the State of Illiniois, did not make it's required pension payments over the years?  The problem is blamed on "unions", and the employees.  Forget about "fair".  It is only a four letter word that does not exist in the State of Thieves.  Spin it anyway you want; but don't call it "fair".  "Theft is theft no matter how it is justified."

faceless wrote on June 14, 2012 at 10:06 am

Why is the word "reform" being thrown around? There is no need for a reform, there is a need for everyone to pay their share that they promised. Reform doesnt mean that you dont uphold your end of the deal. 


The employees paid in their share, now pay your share and stop underfunding the system. Then there is no need for your so called "reform"

MSJ66 wrote on June 14, 2012 at 11:06 am

Public employees do not pay into social security. The 8% employee contribution to social security for state workers still comes out of our paychecks and is put into the pension plan rather than social security. If the state was a private employer who had not remitted THEIR part of the social security contribution (which is equivalent to THEIR part of the pension system) to the federal government then they would be in prison for failing to do so. This is exactly what has happened. The state did not do what they were legally obligated to do which is make THEIR contribution to the pension system and now claim that the pension plans are underfunded because of other reasons such as unions or "cadillac pension plans". Let's put the blame where it solely belongs and that is on every single legislator who has voted for budgets that allowed for no contributions to the pension plan, remember the "pension holidays", even though they knew they were obligated to pay into it. To top it all off even if a state employee worked enough quarters to qualify for social security benefits that benefit is reduced due to having a state pension. I'm tired of having to have "pension reform" thrown on the backs of the state workers when we did what we were supposed to do and the state has not.

Sid Saltfork wrote on June 14, 2012 at 2:06 pm

If "autumn" is the last half of November, the legislators will "reform" the pensions after the election.  Talk to your local legislators about it before "autumn", and the election.  Don't waste your time talking to Chad Hayes, or Dale Righter.  They have proven themselves to be against "fairness" for public employees already.  They both voted for taking health insurance benefits from public service retirees.  Ask the candidates face to face what they will do about pension "reform".

Holly Hirchert wrote on June 14, 2012 at 2:06 pm

Some state employees pay into both the pension plan and social security. I contribute 4% of my salary to the State Employees Retirement System (SERS) as well as Social Secuity and Medicare. My husband, who retired from the University of Illinois, contributed 8% of his salary  to the State University Retitement System (SURS) but none of it to Social Secuity and Medicare.

I don't appreciate the people in the various systems being grouped simply as "public employees". There are several retirement systems that are supposed to receive a match from the state treasury every year. Since Governor Jim Edgar left office these payments have not been made and legislators expected the investment of the employees' contirbutions to make up the difference. Beginning in 2007, the values of the investment funds began to decline in value. Then the recession of 2008 further redcuced the value of these investments. Now the members of the General Assembly want to increase the amount of money contibuted by employees and reduce the pension benefit. This is a continuation of the shell game they have been playing for the past 20 years or more. The pension funds will never be able to meet current obligations if the State of Illinois does not contribute the match that is required by law.

Sid Saltfork wrote on June 14, 2012 at 6:06 pm

My intention for using the term "public employees" was to be inclusive of the state employees, university state employees, teachers, firefighters, law enforcement officers, and municipal employees.  All groups are being targeted, and blamed for the lack of employer payments into their pension systems.  Yes, you are right.  There are several retirement systems.  The only two pension systems that have been regularly funded by the employer are the legislators, and judges pension systems.  A few years ago, the legislature was questioned why all the pension systems were not joined as one.  They did not have a good answer.  They opposed the move to create on system because they did not want their system saddled with the debt of the other pension systems.  When the legislators were asked in the past why they paid the employer payment annually into their system and the judges system, but not the other pension systems; they responded that the payments into their, and the judges pension was "insignificant".  This year's payments into the various pension systems has not been made yet.  Nothing has been said about the legislators receiving their automatic, annual pay raise.  The legislators, and the fed media have been whipping up the public to believe that the employees, and the unions are to blame for the pension problem.  They say that there is no money for making the employer pension payments.  That is not true.  Look at the pork barrel projects.  Look at the corporate tax deals like Sears.  Who doubts that this state's political system is corrupt?  We all know it; but we vote for the least evil because of the antiquated, corrupt political parties, and the media that supports them.  Yes, I did use the term "public employees" because we are all in this mess together.  I apologize if it offended you.

Bulldogmojo wrote on June 14, 2012 at 3:06 pm

When they declare that the pension plan is "unsustainable" in its current form they are inferring that it was once or is currently being "sustained". They were projecting a two billion dollar pension shortfall by year 2000 back in 1996 which is why I jumped into the self managed plan as soon as it was available. The state manages to make the payments into that plan because no 3rd party provider would agree to a pension holiday. Why should the regular SURS people suffer this horrible fate? Eventually the IRS will say you can't manage your pension so everyone goes back to paying social security.

cretis16 wrote on June 14, 2012 at 3:06 pm

I can hear the "reform" announcement goes something like this:



scollins4443 wrote on June 14, 2012 at 6:06 pm
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The comptroller in Dixon, Il. got her pension, she just took it. 30M. is horse feed just not chicken feed. That's what wrong now, public servants mismanaging money and they want to take from Social Security. The reciprients (S.S.)  didn't get a cost of living raise for three years and they never complained, they had to live with it. They were about to cut them off to cater to your pension plans. The government has billions of IOU to the S.S. program and they aren't swift to take care of that. Quit whining and take it like they did. They pay out of their check medical, housing and food to survive. Tax dollars pays the public servants and taxpayers aren't guaranteed vacation pay, free medical, sick day pay, maternity pay and other perks you enjoy! The government has mismanaged the funds so don't blame the taxpayers. They can't give anymore taxes or they would be at the poverty level. I have also seen public servants stand around a job sight while others' working. We take out our checks every week to pay taxes and you'll want more. There's no more to give. One thing, Republicans tickle me with all the rehtoric the talk. If you want more benefits, start checking the city budgets and ask the auditors quit helping others in public service (people who handle the money) to steal! Just ask the mayor in Dixon!

Mike wrote on June 15, 2012 at 6:06 am

Who said anything about taxpayers? Let me go back and reread the article and comments. Yeah, pretty sure that everyone here is squarely pointing their fingers at the legislature for not holding up their end of a deal. 

And who is getting free medical care? I certainly don't. I pay a pretty good chunk every month (in addition to what the University pays--a deal that they made with me when I was hired).

Maternity leave, if one does not have accrued sick leave (which civil servants at the University accrue at like a half day a month or something absolutely ridiculous) is covered by FMLA, which you are entitled to whether you are a public employee or not. 

Nobody is blaming the taxpayers. We pay taxes too! WE are taxpayers. Didn't we just have our state taxes raised last year by a rather significant amount? Where did all that money go? 

As far as us state employees having it so good over folks in the private sector--if you think the grass is greener on our side of the fence, quit your private sector job and come work with us! There are PLENTY of open jobs right now for $10 or $11 an hour which include some of these "fantabulous" benefits you seem to hold against all of us. 

If I were in the private sector making three times (or more) the money I make now, I wouldn't be complaining about the fact that I was hired at the University 10 years ago, they shook my hand and we agreed on my compensation package, and now the State of Illinois is reneging on their part of the deal. 

If someone asked you to build them a house, and told you they'd pay you $100,000 to do it, and you spend the time and effort building them a house, and after it was finished they only paid you $50,000, you'd be a bit ticked off, right? You could file a lawsuit against them for breach of contract. You could file a complaint with the Better Business Bureau. All that good stuff. Well we (collectively) spent YEARS building that house, and the State has come back and said they aren't going to uphold their end of the deal. Can we sue them? Not likely. Better Business Bureau? They aren't a business. They are the State of Illinois and they make the rules. Because we keep electing a bunch of yahoos to make the rules year after year after year. 

Nobody is blaming taxpayers. But don't blame us either. If you think we all have it so cushy, come work with us. Seriously. We don't bite.

Sid Saltfork wrote on June 15, 2012 at 10:06 am

He cannot come to work with you.  His comments clearly demonstrate that he could not handle the job.  It's like a dog chasing a car.  If he caught it, he would not know what to do with it.

aantulov wrote on June 24, 2012 at 7:06 am

If the state pension system must be made to pay out less, any and all cutting should be from the top. Why is anyone paid to manage money making over $150,000 a year in a pension for more than that amount anyway? Can’t they manage money ?; Is someone paying them too much in the first place? And why are persons of such quality getting free health insurance? When such persons of education and clout enter as cash paying customers the industry would be best held accountable. Making these changes for all entering the system now would be enough. The assertion that taking healthcare and meager earnings of school teachers AFTER promising such would be the actions of tyrants, thieves and not in keeping with moral values of honesty, integrity or valor.