Category Archives: Pension

Illinois Public Pension System, TPS, earned .76 percent last year

If you are a private-sector worker with a 401(k), this will be a familiar story for you: The state’s largest public pension system earned a mere .76 percent on its investments in fiscal year 2012, down from 23.6 percent the year before. A wildly volatile market is to blame, says the Illinois Teachers Retirement System. TRS already had lowered its expected return on investment from 8.5 to 8 percent, meaning the state will have to pay $290 million more into the system next year – and $290 million less into other essential needs. Without change to the pension system, the state remains vulnerable to the fickle U.S. and international market.

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Is there a pension problem?

Some call it fake reform, some say it’s meaningless, some say it’s reckless. The editorial board at the Rockford Register Star says what the heck, vote for the constitutional amendment on pension enhancements Nov. 6. “ On Nov. 6, vote yes to take a small step toward recognizing that there is a pension problem,” the paper says.

Illinois’ State’s Financial Dysfunction

Illinois is getting lots of national publicity today, though not the kind the state wants. A report issued Wednesday by a committee headed by former Federal Reserve Chairman Paul Volcker and former New York Lt. Gov. Richard Ravitch is unsparing in describing the state’s financial dysfunction. “The culture of budget gimmickry and short-sightedness pushes costs off to the future, but eventually that will be impossible — retirees may lose their pensions as funds dwindle.” The New York Times also took note.

Chicago Papers to Voters: Don’t Be Chumps

The Chicago Tribune editorial board  says anyone who votes for the pension amendment on the Nov. 6 ballot is a chump. “Don’t be a chump,” says the Trib. It adds that what we really need is a constitutional amendment that gives lawmakers some guidelines for what can and can’t be done to fix the pension disaster Illinois faces. Rival The Chicago Sun-Times agrees: “Voters should say no to the constitutional amendment and send the message that Illinois residents want real pension reform, not potentially harmful window dressing.”

 

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Does “Unlucky Article XIII” on November Ballot Cheat Voters?

Post by John Kindt*

The Constitutional Amendment to Article XIII on the November ballot is cleverly drafted to concentrate more monetary power in the same Springfield legislative leaders who have de facto bankrupted the Illinois Treasury. With $83 billion in projected liabilities, Illinois has the nation’s largest state budget crisis.

This “Unlucky Article XIII Amendment” is crafted to strip local governments and voters of current decision-making prerogatives and transfer those decisions to Springfield. As such, it is lose-lose for the entire political spectrum of Illinois voters.
Among other subterfuges, the Article XIII Amendment overrules and destroys the Illinois Constitutional protection against eliminating or reducing earned benefits, such as pensions for state retirees who by state law cannot receive Social Security and, in many instances, cannot receive Medicare and Medicaid.

Furthermore, thousands of elderly retirees and current state employees were mandated by Illinois law to pay into Illinois retirement systems and then legally prohibited from having Social Security.

This Illinois Article XIII Amendment contains more words than the entire first 10 Amendments to the U.S. Constitution—the Bill of Rights. The obvious intent of the verbose Illinois Article XIII Amendment is to hide its true impacts from voters in a 700-word avalanche of unnecessary and deceptive words.

Marketing experts know that few voters will read beyond the benign first sentences and that voters will be inclined to vote “yes” in that benign spirit. While the voters may wish to vote to concentrate more monetary power in Springfield leadership, they should not be tricked into misdirecting their votes and eliminating their current Constitutional safeguards by the confusing 700 words in the Article XIII Amendment.
For example, hidden in the “last sentence” is the new Constitutional provision: “(d) Nothing in this Section shall prevent the passage or adoption of any law, ordinance, resolution, rule, policy or practice that further restricts the ability to provide a “benefit increase”, “emolument increase”, or “beneficial determination” as those terms are used under this Section.”

Thus, this new Article XIII Amendment overrules the current Constitutional safeguard known as the “non-impairment provision” in Article XIII, sec. 5, of the Illinois Constitution.

As confirmed by expert memoranda, for example, the State Universities Annuitants Association memoranda (at www.suaa.org, June 8, 2012), the new Article XIII Amendment was drafted outside normal processes—including the Springfield Legislative Reference Bureau.
Among other problems for local taxpayers, the language overriding the “non-impairment provision” was added at virtually the last minute as the “last sentence” hidden at the end of 700 words.

The legislative voting process obviously misled numerous Springfield legislators who voted to place the Article XIII Amendment on the November ballot—when the Amendment’s language had not been properly vetted.

The Article XIII Amendment has also been disguised with various monikers including “HCA49” and “HJRCA49,” and it was originally floated by Speaker Michael Madigan’s office as “Amendment 5.”

On the ballot certified in September by the State Board of Elections, none of these issues are even mentioned in the summary, the “Explanation of Amendment.” Instead there is an emphasized caveat in bold letters which arguably encourages voters to vote “yes” by beginning with the warning: “Note: The Failure To Vote This Ballot ….”’

In contrast with the certified ballot’s bold print emphasis instructing the vote on the Article XIII Amendment, voters will have to play “hide-and-seek” to find and decipher the 700 words of the Article XIII Amendment—before they go to the polls. The entire 700 words are not even printed on the ballot.

After the November election, the public outrage will begin when all public employee organizations (such as teachers), budget reformers, good-government civic groups, and even misled Springfield legislators finally realize that Illinois voters were deceived into voting “yes” for the Article XIII Amendment.

By voting “yes” for the “Unlucky Article XIII Amendment,” the voters will have destroyed their current Illinois Constitutional protections and concentrated huge new budgetary powers in the same Springfield leadership which has caused the Illinois budgetary crisis.

*With 3 earned graduate degrees in law, John Kindt has often testified as an academic before Congress/state legislatures regarding business and legal policy issues.

 

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Illinois Blames Politicians, not Unions on the Pension Crisis

Illinoisans aren’t stupid when it comes to the cause of the pension crisis: They blame the politicians, not the unions.  And they’re right. It was lawmakers who skipped nearly $30 billion in payments to pension systems over the years and failed to take any action as the state’s liability exceeded $83 billion. Your thoughts?

Cross: “Financial Mismanagement is Pushing Families Out of State”

Illinois House Republican Leader Tom Cross, R-Oswego, tells us what we already know: “Financial mismanagement is pushing families and businesses out of our state. The time to reform the pension system is now.” No mention, however, of the sole obstacle to pension reform: school districts footing their own pension bills.

Illinois DCFS Getting Cuts Because of State Pension Issues

The Illinois Department of Children and Family Services protects the state’s most vulnerable children. Proper functioning of this department can mean, literally, the difference between life and death to a child suffering from abuse or neglect. The state’s budget trouble, caused largely by state pension payments cutting into funding in other areas, is a constant threat to this important agency. http://www.galesburg.com/news/news_state/x470401518/DCFS-rescinds-hundreds-of-layoffs

Letter to Editor: “We paid our share, Illinois didn’t pay their’s”

We can’t argue with this letter writer, who notes that the current pension mess in Illinois can’t be blamed on public employees or retirees. They paid their required contributions faithfully. Unlike the state, they didn’t have the option of skipping payments when they proved inconvenient.

New Illinois Amendment to Slow Pension Increase: Useful or Meaningless?

For years, state lawmakers freely boosted pension benefits for public employees. Now that the state is beyond broke and desperately trying to figure out a way to keep those pension funds solvent, lawmakers want voters to make it harder for them to pass future pension sweeteners.

A constitutional amendment referendum on the November ballot would require a two-thirds majority to enhance pensions. What a meaningless proposal, says The Southtown Star columnist Phil Kadner http://bit.ly/TlzK1z

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