Undo Tier 2. The fight for pension fairness.
At the Illinois Education Association state representative assembly in 2010 I stood at a microphone and literally begged the leadership not to do it.
Up until that meeting the position of the IEA was to forbid our lobbyists from offering any compromise to our constitutionally protected right to a fair retirement income.
According to the language of the Illinois constitution, retirement benefits could not be reduced or impaired.
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But that right only applied to current members of the Teacher Retirement System.
Future teachers and state workers could be placed into a different system.
I warned that is exactly what would happen.
And it did.
My position did not win out. The IEA lobbyists were given permission to lobby for so-called pension reform.
A week later Governor Quinn and Speaker Madigan saw the IEA action as a sign and pushed through the legislature a Tier 2 for all teachers hired after January 2, 2011.
After that hiring date Illinois teachers would have to work longer, receive less in their pension but pay the same amount into the system as Tier 1 teachers.
In fact, Tier 2 teachers are the only ones paying enough to reduce the debt increase.
With the excuse that we need to save the taxpayer’s money the rash action by the legislature turned into a nightmare. Future retirees’ pension benefits will likely fail to meet the federal standard of “safe harbor,” meaning the pension benefit will not even be what would match Social Security.
Illinois teachers do not currently receive Social Security.
As current Tier 2 teachers reach retirement and fail to reach the federal requirement of safe harbor there will be a slew of law suits. State and local school districts will be on the hook for millions, maybe billions, in back payments.
Taxpayers will have saved nothing.
Now the very same politicians who created the mess in the first place are scrambling. The Chicago Tribune, which led the charge for Tier 2 pension reform back in 2010, is calling for reform to Tier 2.
The “fix” they are calling for is to reform the reform without it costing anything.
They are calling for the legislature to meet federal safe harbor without “sweetening” the benefits to Tier 2 teacher retirees.
That would be a mean trick to accomplish.
Meanwhile, the Center for Tax and Budget Accountability continues to point out that the failure to achieve public pension fairness is not a benefit problem. It is a structural problem in which the state continues to raise less revenue than is needed to fund its responsibilities.
Nothing in the current pension discussions addresses the structural problem.