Illinois public unions will sue regardless of pension plan chosen
James McNamee, President of the Illinois Public Pension Fund Association, wrote in response to Scott Reeder’s column, Don’t worry about pension lawsuits; worry about savings, that “An unconstitutional reform is no reform at all. It might feel good to all those who have been advocating that public employees are the problem. Not the fact that not paying what you were supposed into the retirement system.”
It’s not that public employees are the problem; it’s that the legislature over the years has voted for pensions that are unsustainable, regardless of the funding and were doomed to bankrupt the state without higher and higher income taxes paid by Illinoisans.
Excerpt from Scott Reeder:
In our litigious society, lawsuits are inescapable.
So let’s quit thinking that this matter won’t inevitability be settled in court.
The question worth asking is: What do we want to be the test case to go before the Illinois Supreme Court?
Neither Mr. McNamee nor the General Assembly knows if these pension reform plans meet state constitutional requirements. The response of Mr. McNamee intentionally missed the entire point of Mr. Reeder’s column.
That point being that public unions are going to sue the state regardless of which pension plan is implemented, so the General Assembly should vote for the best solution to pay off pension debt, which will undoubtedly be appealed to the Illinois State Supreme Court.
According to Scott Reeder’s column, over the next 30 years a defined contribution plan, similar to a 401K plan, could save state taxpayers $218B; Madigan contends that his reform measure would save $150 billion; and if the union bill backed by Senate President Cullerton and passed by the Senate Thursday were to become law, it would save only $46 billion.
Public unions do not want the test case to be a 401K type defined contribution plan going before the courts, which they do not control and which removes the debate from the political arena where they might better force the solution toward the union backed Cullerton plan. The senator’s plan doesn’t cost the unions as much, but it doesn’t resolve the pension debt problem.
The public unions are not certain how the courts will rule on the constitutionality of the plan, despite their assurances to the contrary. The unions are merely placing a straw man illusion in front of voters to divert attention from the state income tax increases that would ultimately be required to pay for their pension plan through a progressive tax or possibly by taxing retirement income for the first time.
Also, those who are benefiting from the current system want to maintain the status quo. Taxpayers can no longer afford these pensions for public unions who work for them, regardless of how the pensions have been funded.
It’s about time state employees receive the same type of pension plans as the rest of us. Very few in private industry receive any COLA; especially not 3% compounded COLAs, which are diverting tax dollars from the services that are supposed to be provided by the state. Soon there will be nothing left for anything else but funding pensions.
Private employees do not get a vote when their private companies tell them how their pensions will change going forward. Approximately 80% of private employees have been moved to 401k defined contribution plans.
Private employees get keep what they had earned prior to the time of the switch, but from that point on receive defined contribution benefits as their pension.
What possible reason do public unions think they are entitled to more in retirement than those who pay their salary and benefits?