There are a lot of panic-stricken teachers in Illinois right now. A week ago they were looking forward to a very comfortable retirement, indeed. Today not so much. They’ll still have retirements that are better than those of most Americans but, frankly, they’ve had a significant amount of money snatched away from them and they’re reasonably nervous about that.
That the pension reform law passed by both houses of Illinois’s legislature, which would take effect on July 1, 2014, will receive an immediate court challenge goes without saying. Despite judges having been exempted from the law’s provisions there is still such a thing as the state’s constitution and precedent and both are against the law.
That the law leaves the significant number of Illinois public retirees who have retired on pensions above $500,000 per year largely unscathed is a scandal and an outrage. My modest proposal would be to cap Illinois public pensions at three times a teacher’s Tier 2 cap or about $325,000, indexed to inflation. To say that will cause suffering to anyone is to torture the definition of “suffering” beyond recognition.
Of course, that wouldn’t pass constitutional muster, either, but if we’re casting law and precedent to the winds why stop where the new law does?
Update
The statement of the coalition of public employee unions opposing the law is here. Here’s the most relevant quote:
Senate Bill 1 is attempted pension theft, and it’s illegal. Once overturned, its purported savings will evaporate, and the state’s finances and pension systems will be left in worse shape.
“Our coalition has been consistently in contact with our attorneys, and today we directed them to prepare to file suit. We will challenge SB 1 as violating the constitution and ask for a stay of the legislation’s implementation pending a ruling on its constitutionality.
SB1, as I’ve said for some time, is certainly in violation of the plain text of the state constitution.
It’s too bad the unions involved didn’t address this problem long, long ago. Issues like double-dipping, outrageous pensions being paid, pensions being paid for phantom service, and so on all should have been dealt with years ago.
Will public employee union members oppose legislators who voted for this law? I seriously doubt it. I believe it’s already too late for primary challenges. Think that’s a coincidence?
As you’ve noted, it also doesn’t help the injustice that residents of Chicago (where despite the wealth of some neighborhoods, per capita income is actually only 70% of the state average!) double pay for teacher pensions – once for their teachers, and a second time for teachers in the rest of the state.
That the law leaves the significant number of Illinois public retirees who have retired on pensions above $500,000 per year largely unscathed is a scandal and an outrage.
*blink*
Surely that’s a typo.
Elipses, I don’t think anybody is receiving a single pension worth $500,000; a judge might get a $180k annual pension at most, but if he worked for the legislature he might get another pension from a different fund, and if he worked in public administration, he might have another pension from the state, or another from the city.
And then there are the labor union qualifications, which for some reason allow union leaders employed by the union to access the public pensions if they’ve ever spent a day on a state job. Their years of union service are treated like years of state employment.
It’s not a typo but a mistake and it’s not my mistake. The highest retired public employee pension in Illinois is over $500,000. That’s a retired oral surgeon.
Take a sizeable salary, then increase it by the required 3% COLA per year for a number of years and you’ve got a lot of six figure pensions.
Take a gander at this. A typical Illinois associate judge earns about $166,000. Take 75% of that and you’ve got $124,500. That’s the starting pension.
Add 3% a year for five years. $128,235. $132,082. $136,044. $140,125. $144,328. You get the idea. There are 403 Illinois associate judges. The number of retirees adds up fast.
It’s particularly aggravating to me since I don’t believe that elected officials should be eligible for any kind of pension from the state.
Let’s take another example. The average salary of an Illinois state trooper is $83,000. Take 75% and the retiring pension is $62,250. After five years of 3% increases that’s $72,164. There are 2,008 Illinois state troopers so that means who knows how many retired troopers.
And then there’s “double-dipping”, to which PD refers.
Also see here.
Here’s another handy reference. There are quite a few Illinois teachers and (more likely) school administrators earning more than $200K per year. Take the pension formula, multiply it by 3% a year over the life expectancy of the retiree…
And don’t call me “Shirley”. 😉
Dave at 12:06 is exactly right. I know people recoil at that in disbelief, but that’s really the Big Scam and what people just don’t understand. And he didn’t even mention pumping up salaries in the last couple of years of, ahem, “service,” for politically favored public employees. As I am fond of saying WTFU, people. You are being duped, or self duped by ideology.
So, TimH, still think the public vs private worker is making a sacrifice??
And don’t call me “Shirley”.
I realized I was walking into that just after I hit SUBMIT.
I knew about double dipping and COLAs (I used to work on these things) but $500,000 seems excessive, even given that.
I guess it’s that I only worked on local plans in a particular region, and didn’t realize the usual ERISA caps don’t apply. Holy smokes!
A movement is afoot here in CA, via some mayors, to address cutting pension plans. A measure is being considered for the November ’14 ballot — something that would either be done by the initiative process (requiring signatures), or coaxing the democratic super majority legislature to put it on the ballot — which won’t happen.
Here is one way to get nearly a $500,000 per year pension for the same work during the same period:
“Liberato “Al” Naimoli, president of Cement Workers Local 76, . . . retired in 2010 from a $15,000-a-year city job that he hadn’t worked at in a quarter-century. He now receives a city pension, based on his union salary, that pays him about $158,000 a year, more than any other annuitant in the city laborers’ pension fund.”
He also receives a second pension from Laborers’ Pension Fund for Chicago and Vicinity at about $60,000 per year, and next year will start receiving $220,000 a year from a national union pension. He is skirting laws that are supposed to preclude him from receiving a city pension, when he’s eligible for a union pension covering the same time period.
Double-dipping labor leaders stand to reap millions
I once played golf (many, many years ago) with an IL politico who now has a golf course with his name on it on the SW side. (For Dave, a certain GDu) I feigned innocence and just a farm boy now working in the mills so he entertained “the kid” with war stories, including all the pension stuff.
I was only 23-24 years old, but it was the proverbial “light bulb” going off moment. I remember thinking “these fuckers are as dishonest as shit, and they just laugh at the idiots who believe their tripe speeches.” Its a complete and total scam. Period. Full stop. No room for argument.
Can you say “Obama?”
Earth to Michael. Earth to steve. And I guess, earth to Horton……
I thought this pension story was pretty bad:
“Two lobbyists with no prior teaching experience were allowed to count their years as union employees toward a state teacher pension once they served a single day of subbing in 2007.”
How much was that single day of subbing worth?
$93 for one day’s pay, plus
$108,000 a year pension (est.), starting at age 60 (the next year)
Union Hot Shots Piggyback on the Backs of Schoolteachers
BTW/ Illinois State troopers have the highest payout over time because they can retire at age 50, and start receiving 80% of their pay, plus COLA.
PD,
Those pension stories are (to be polite) very disappointing.
Drew,
One can learn alot about life playing ‘dumb,’ when you’re around an egotistical blowheart.
Earth to Drew- Some of the worst pension abuses have been with police contracts. As we all know, those are right leaning groups. There are red states and cities with pension problems also. I really cannot believe that you are going to try to tell me that only Dem politicians are corrupt. They are all about the same, just corrupt in different ways.
I would not that I am on record here, many times, saying that I would like al public employees to be in defined contribution plans like everyone else. That should be our first action as it should be the easiest. I dont really have much of a problem with decreasing pension payments for current public pensioners. However, if we do that, I don’t ever want to hear another word from conservatives about the sanctity of a contract. (Suggesting that even a penny be cut from the bonuses and/or pay of bankers really got that phrase invoked a few too many times.)
Steve
Once again, you’re exaggerating. In 2008 the Fraternal Order of Police endorsed John McCain. In 2012 the FOP did not endorse Romney. Similarly, the National Police Union endorsed McCain in 2008 but did not endorse Romney in 2012.
If they’re right leaning, they’re not reliably right leaning.
Here’s the provision in Illinois’s state constitution:
I don’t find that particularly ambiguous. My recollection is that’s been fully litigated already. My guess is that either the state legislators don’t care or they think that with the present exigency the justices will abandon both black letter law and precedent to support their position. We’ll see.
As we all know, those are right leaning groups.
Everything in the ‘bad’ category you consistently argue, Steve, is right-leaning and republican. Aren’t most unions, generally speaking, endorsed and supported by liberals? Firefighters and police, though, may be the exception, as they are tip-toed around more, because of their first-responder image and need in the public, when dealing directly with their pensions. However, that’s changing, simply because of the holes being created in unfunded pension liabilities, everywhere, that are becoming more obvious by the day.
I have friends and relatives who are Illinois state troopers, and they tend to be the right of me on most issues, but they vote in state elections on their pensions. Its a pocketbook issue.
I see no problem w) the troopers’ pension benefits, except for the potential to retire at age 50. I understand that some aspects of the job are more difficult as they get older, but there is enough work to do that they can continue to help the state in their 50s and 60s.
The worst abuses are w/ union leaders/lobbyists. The people who work one day and can receive millions of dollars. I don’t want to leave the impression that rank and file play these triple-dipping games; its a sport for the politically connected.
Not only exaggerating, but this isn’t left right or Dem Republican as some people only seem capable of viewing the world. Its right and wrong, fair and unfair, good policy and bad policy. Oh, and from the raw practical side, financeable or not financeable.
Drew,
You boiled issues down to what should be important considerations in peoples’ decision-making:
What a concept!
“Its a pocketbook issue.”
PD,
Most things are pocketbook issues — mainly whose pocketbook something effects the most. For instance, dealing with rent control, conservative tenants living in low rent, rent-controlled units, will continue to vote for liberal candidates promising to keep the RC laws in place. I suppose that kind of reasoning is also why conservatives will pick and chose which entitlement/social programs they support and don’t support. Consequently, right-leaning seniors often are thumbs-down on SS/medicare reforms because of fears it will negatively effect them, while they bristle at other social programs outside the realm of their own usage.
Dave- The FOP endorsed the GOP candidate in 2000, 2004, and 2008. In 2008, they did not endorse Romney, but they also didnt endorse Obama. Even when they didnt like Romney for his support of Walker, they couldnt bring themselves to endorse Obama. If you go through it state by state, pretty boring and I dont recommend you do, they tend to support the GOP. As I said, they lean right. Yes, you can go city by city, and you will find some unions that endorse Dems, especially in one party cities, but the tendency is pretty clear.This is opposed to the teachers unions that are firmly on the left. No leaning there. (I suspect you can find some group of teachers in some union somewhere who endorsed a Republican, but it would be rare.)
Also, I still stand by the other statement you saw as an exaggeration. If you dont have insurance (including govt) AND you dont have money, good luck getting health care other than in an emergency. We did a survey in our area and not one surgicenter within 75 miles will take a pt w/o insurance or payment up front. Yes, there are still some charity groups, but it is not reliable. Many docs will continue to provide care for long term patients even if they lose their insurance, but even then they run into trouble if they need major testing or a procedure.
Steve