Quinn taking a shot at ending pension abuses
Gov. Pat Quinn says he will appoint a high-ranking panel to look for ways to end abuses of the state's woefully underfunded pension systems, an idea that has merit.
The state's troubled pension systems have gotten a lot of attention over the last couple of years as politicians grappled with the worst economic crisis in the state's history.
In 2010, legislators made dramatic changes in terms of eligibility and benefits in state pension programs. But those changes only affect employees hired after Jan. 1, 2011, who won't retire for decades.
House Speaker Michael Madigan and Republican Leader Tom Cross last spring introduced legislation providing three options to current employees:
— Keep benefits the same but require larger contributions from employees.
— Accept the reduced benefits approved last year for new employees.
— Accept a 401(k) defined contribution plan.
The proposal enraged union leaders, who argue that the state's pension problems result from elected officials' repeated failure to make the required annual financial contributions to the fund. Many legislators and pension experts thought the legislation would not pass constitutional muster, and it didn't even come up for a vote.
Against this backdrop, stories about abuses of the pension system by well-connected insiders are particularly galling.
An investigation by the Chicago Tribune in October exposed two employees of a teachers' union who worked one day each as substitute teachers and were expected to receive more than $1 million each in pension payments from the state's Teachers Retirement System. It was legal under a law passed in the 1990s, but no one remembers how or why it was passed. The Legislature passed a measure to kick the two out of the teachers' pension system, but Gov. Pat Quinn has not signed it yet.
More recently, the Tribune reported that dozens of employees of private groups qualify for public pensions through Illinois State University even when they don't work on campus, also a legal arrangement but one that doesn't sit well given the pension problems.
There are other documented examples of education union officials and employees of nonprofit, nongovernmental organizations getting lucrative pensions from the state's pension systems.
Now Quinn says he'll appoint a panel to review the pension systems and suggest changes to prevent abuses in the future. The commission will be led by Jerry Stermer, one of Quinn's senior advisers, and will consist of legislators of each party from the Senate and House as well as union representatives and others.
This will be a welcome development if the commission can figure out ways to keep insiders from stuffing themselves at the public trough, as some of the most egregious examples show, or to set straight the rules on whether employees of private organizations can be part of the public pension system.
Thanks to decades of neglect, Illinois has one of the most underfunded public pension systems in the country, with an estimated $86 billion in underfunding. Even last January's huge state income tax increase will go almost dollar for dollar to $6.3 billion owed in pension payments, leaving little or nothing left for the state's huge backlog in bills, increased Medicaid costs or increases in any other programs.
Ending abuses won't cure the underfunded pension funds, but it will keep unqualified pensioners from draining the funds and remove a significant irritant as the state grapples with finding permanent solutions to one of its most vexing financial problems.