Just correct the mistake

Just correct the mistake

Legislators' simple mistakes can be awfully complicated.

Nobody ever said that addressing Illinois' public pension woes would be easy. But state legislators have made it even more difficult than they thought — maybe even impossible — by including a provision that will reduce university retirees' benefits if they work past June 30.

However reluctant they may be to bring up the issue again just months before an election, state legislators must address this problem with corrective legislation for at least two important reasons.

One is related to fundamental fairness: What retirement benefits university employees have earned they must be allowed to keep.

The second reason relates to the first: At the very least, the Illinois Constitution's "non-diminution" clause guarantees pension benefits already earned and any legislation that does not recognize that will almost certainly be struck down by the courts.

It's no secret that there already are multiple lawsuits pending that challenge the pension reform legislation adopted by the General Assembly and that the stakes surrounding this litigation are high — both for taxpayers and retirees.

There is considerable disagreement surrounding the meaning of the non-diminution clause guaranteeing pensions benefits of public employees.

Public employee advocates contend that it means that there can be no modification of the pension rules in existence at the time an employee was hired. In other words, if an individual was hired at the time when there was no limit on earnings on which pensions are based and there was a guaranteed annual 3 percent cost-of-living increase, those rules cannot be legally modified.

The conflicting view is that what benefits a person already has earned under the rules remain sacrosanct but that benefits not yet earned are subject to modification. In no case, however, can benefits already earned be reduced, and that's the situation facing hundreds of university employees contemplating retirement by June 30 to avoid a decrease in benefits already earned.

University officials have sounded an alarm about the impending brain drain, with UI spokesman Tom Hardy stating colorfully that "people are queued up like homesteaders for the Oklahoma land rush."

Legislators apparently meant to establish a legal "floor" of benefits earned as of June 30, 2014, but mistakenly set the floor a year earlier.

Since setting the data at June 30, 2014, was the intent all along, it ought not to be a problem to persuade legislators to actually do what they intended to do. So far that has not happened, but it needs to happen soon because those contemplating retirement have to make a decision by the end of May.

If push comes to shove, it seems certain that many of those who are eligible to leave will leave if they think staying will cost them too much money in lost pension benefits.

That would be a self-inflicted wound with potentially monstrous consequences, and it cannot be allowed to happen.

Illinois is in dire straits financially, running deficits and owing debts that are unconscionable. Perhaps its most serious problem is roughly $100 billion in underfunded public pensions.

The pension bill the Legislature passed and Gov. Pat Quinn signed was aimed at reducing the underfunding by modifying public employees' pension benefits, specifically benefits not yet earned. One example is the reduction of future cost-of-living increases for retirees.

People can disagree about whether that's appropriate or legal under the confines of the non-diminution clause. No one, however, can disagree that Illinois' financial future remains bleak if the pension mess is not brought under control.

But it has to be done right. The Legislature has made a mistake that must be corrected soon if disaster is to be averted.

Sections (2):Editorials, Opinion

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Sid Saltfork wrote on April 22, 2014 at 8:04 pm

"It cannot be allowed to happen"?  What are the options?  Pass another "pension reform" bill before the original one's constitutionality has been decided on by the State of Illinois Supreme Court; or chain the want to retire employees to their work stations?

How about paying the debt owed by law?  Raise taxes, cut spending, and sell state assets; but pay back the money stolen.  This article is just another propaganda piece in the futile effort to weasel out of paying the retirees' legally earned retirement.

The supreme court can rule against part of the bill, and rule in favor of part of the bill.  The 1% reduction in employees' pension contributions, and more assurances of employer required pension payments may skirt the constitutionality of the bill for current employees.  However, there is nothing in it for the retirees.  The court could rule that the "pension reform" is legal for the current employees; but unconstitutional for the retirees. 

Why gamble on retirement?  Get out now if you can.  The only ones who will criticize you are the ones who do not want you to be paid the retirement you earned.