Pension Update from January

Samuel E. Yusim, Region 37 GPA
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This is the first posting in what we expect to be an ongoing series of pension reports to IEA members.

The focus will be on both the legislative debate concerning the state pension systems and the actions that IEA (in concert with other labor organizations) is taking to protect member pensions.

Members are encouraged to email questions about pensions to iealistens@ieanea.org

Pension funding and benefit discussions are taking place among policymakers and the various labor unions whose members contribute to any of the state pension systems. IEA is an active participant in the discussions; our members must be represented wherever their pensions are being discussed. The process benefits from the expertise IEA staff and leaders can bring to the discussion.

The IEA has made clear that the organization is willing to consider pension proposals that meet all of the following criteria:

1. Proposals must be constitutional
2. Proposals must be fair to IEA members
3. Any change must maintain the stability of the state retirement systems.

Gov. Pat Quinn has declared his interest in resolving the pension issue in 2012. To that end, the governor has announced formation of a pension panel comprised of members appointed by the state legislative leaders. This group, which has already had its first meeting, is charged with initiating the discussion on how the pension issue should be addressed.

IEA, along with the other unions, will participate in the panel’s discussions when invited to do so.

In addition to the governor’s pension activity, IEA is also engaged in pension conversations with the various legislative caucuses and with members of the Illinois labor coalition (which includes IFT, AFSCME and the AFL-CIO).

IEA leaders and staff also meet regularly to discuss the pension issue. NEA is providing resources to assist with the pension issue.

IEA has not committed to support any changes in pensions.

Members of the labor coalition have discussed a number of proposals that have come out of the legislature for the purposes of trying to understand what the potential impact of any proposal would be, should it ever be passed into law and upheld by the courts.

Among the ideas that have been floated by legislators are:

• Shifting a portion of the “normal cost” of pensions (year to year expense for
benefits earned by active members, not the underfunding cost) to school districts,
 
• Increasing member contributions to address the address the funding problem,
 
• Creating a “Pension Stabilization Fund” with dedicated revenue from a specific
source, such as gaming,
 
• Modification of actual benefits (COLA, retirement age, multiplier, final average
salary),
 
• Reducing the funding target for the state systems from 90 percent to 80 percent
in 2045.

Again, IEA has not taken a position on any of these proposals. Some of these ideas are clearly unconstitutional.

IEA remains willing to listen because we believe it is in the members’ best interest for the organization to be actively engaged. The pension systems require consistent funding that works for our members and the state. We believe a solution to the funding problem is needed, but it must meet our three principles.

Without input and serious negotiation with the affected organizations, the likelihood of the legislature passing a truly bad, unconstitutional proposal, such as SB 512, becomes more likely.

We will fight SB 512 and any other unconstitutional, unfair and destabilizing pension proposals with everything we’ve got.