Posts of Updates in Pension Education

A Call for Action Against Illinois Pension Reform by Glen Brown

2011-09-25T15:01:16.046Z

The confrontation between rights and power has a long history. John Stuart Mill, in his famous essay On Liberty, examined the “struggle between Liberty and Authority… between subjects… and the Government.” A question he might have asked today if he were alive is what should be the limits of power that legislators have over their constituents when some of their decisions border on political despotism?

No doubt, teachers and other public employees have been blamed for the mismanagement of the states’ budgets all across the country. It is easy to construct victims with a dubious call for “Shared Sacrifice.” Of course, by “Shared Sacrifice,” legislators and executives of corporations mean only middle-class Americans. RoseAnn DeMoro, the leader of National Nurses United, says the wealthy have “created an economy on to themselves without people.” To blame teachers and other state employees for the state’s budget deficits is reprehensible.

We are told that to fix the pension system teachers must pay for the system’s liabilities; that teachers have to compromise. To change public employees’ constitutionally-guaranteed pensions with the passage of a law that mitigates certain benefits and deprive their basic rights is an encroachment of their right to human dignity and justice. It is a calculated infringement of those essential principles, made evident by the lack of reciprocity and obligation for those legislators and their lawyers and businesspersons who will knowingly produce such a bill, and by those who willingly support fallacious reasoning.

With the enactment of a pension reform bill, legitimate rights and moral concerns are in jeopardy not only for teachers but for every citizen in the State of Illinois. Defrauding a person out of his or her guaranteed rights and benefits violates a most significant interest in morality and ethics and in basic legal principles of both the state and U.S. constitutions that protect every citizen. Attempting to find ways to break those promises through the likes of the Civic Committee of the Commercial Club of Chicago’s Sidley Austin LLP is a costly and dangerous effrontery and precedent to set in motion.

In a proposed world of freedom, justice, and peace, the General Assembly of the United Nations adopted and proclaimed The Universal Declaration of Human Rights in December 1948. Article 23 of that document stated that “Everyone who works has the right to just and favorable [compensation] ensuring for himself and his family an existence worthy of human dignity…”

What we must do now is defend our rights and ensure that proclamation; we can never become complacent in our belief that justice exists because policymakers can be trusted to make ethical and legal decisions for the rest of us; moreover, we can never become indifferent to political power and what exorbitant wealth can buy. As Bill Moyers said, a “democracy is on the auction block, [when it is] subject to the highest bidder.” Citizens United and “We Mean Business” epitomize what money can buy, and what it can destroy.

Although we can infer that policymakers will often pass laws for their own advantage, most of us still adhere to the belief that the legislators’ duty to act justly stems from their duty to keep promises. We should recall that despite their pledges, the legislators’ criteria for justice are their consideration for what is most expedient for them—their re-election, which is concealed by an often hypocritical concern for the general welfare of the state’s financial condition.

Undoubtedly, teachers’ and other state employees’ pensions are not generally viewed as in the best interest of the well-being of a legislator’s voters. Many people believe that public pensions serve no purpose, except solely for a teacher’s enviable, financial promise. So how should we argue then for the expediency of such a right? “Is being unjust to a minority of citizens beneficial as a means for the majority’s attainment of happiness” (Mortimer Adler)? Thomas Jefferson once asked, “Should not “the minorities [of individuals] possess their equal rights, which equal law must protect?”

There are no easy answers to these three questions. All of us will claim certain beliefs as truths. All the same, we must remember that we cannot abdicate our right to representation in a decision-making process that affects only us.

It is up to us then to secure our future by opposing the unfairness of pension reform when the State of Illinois has a revenue problem. It is our challenge to defend our dignity with stubborn resolve. It is our primary task to enlist every citizen in a unification of will to protect our rights, as they are earned benefits for our life’s labor. This undertaking forestalls our pro-active and continual engagement with the bankrollers’ marionettes in the General Assembly and our re-education of the misinformed public.

Indeed, teachers’ fortitude and knowledge are our power, and this resilience and “knowledge must [become our] action” (Sophocles). Our collective financial fate will be determined by faulty legislation. Both active and retired teachers are intrinsically bound to one another in this regard. As Martin Luther King eloquently stated, “We are caught in an inescapable network of mutuality, tied in a single garment of destiny.” Let us follow King’s message of “direct action” and unify our efforts to confront the struggle we have with the powerful interests of the wealthy in Illinois; let us “arouse the conscience of not only our colleagues but of our communities” and expose the lies that will rob us of our rights and our benefits.

Our goal will always be the preservation of justice and self-worth for all workers in Illinois. “We Are [truly] One” when we rebel against inequality; when we rally together to un-elect policymakers who have supported unconstitutional pension reform instead of necessary revenue restructuring; when we reach out to those in our communities who are overwhelmed and offer them hope for a better future. To do these things is to act upon principles that we believe are so valuable that to do nothing would be a greater injustice.

Emolument by John Dillon (updated May 27, 2012)

2011-09-27T13:23:18.902Z

PENSION VOCABULARY of the WEEK by John Dillon (May 27th)

Emolument - 5/27/12 Tribune - 5/20/12 Catch 22 - 5/13/12. Miss-Information - 5/6/12. Doublethink - 4/29/12. Appeasement –4/25/2012. Schadenfreude – 4/22/12. Cassandra – 4/15/12. Tenure– 4/8/12. Dodger – 4/1/12. Delusional – 3/25/12. Hybrids– 3/18/12. Some Skin In the Game – 2/11/12 Charter School Discipline –3/4/12 Charter Schools II – 2/26/12. Charter Schools – 2/19/12. Sick Leave – 2/12/12. War Chests & Loopholes – 2/5/12. Rat P.A.C. – 1/29/12. Default – 1/22/12. State Bond Credit Ratings – 1/15/12. Milieu, Environment, or Culture –1/8/12. Simple & Compound Interest – 1/1/12. C.O.L.A. – 1/25/12. Pension Holiday – 12/18/11. ARC– 12/11/11. Henry Green & Helen Kinney – 12/4/11. Pension Obligation Bonds – 11/27/11. Ponzi Scheme – 11/20/11. 401(k) plan – 11/13/11. Scapegoat – 11/6/11. Legislative Amendment – 10/30/11 SB512 – 10/23/11. Money Purchase Benefit (Option) – 10/16/11. Veto – 10/9/11. How a Bill Becomes Law – 10/2/11. Zavist – 9/25/11.
May 27th - Emolument

“I wouldn’t give you two cents for all your fancy rules if, behind them, they didn’t have a little bit of plain, ordinary, everyday kindness and a little looking out for the other fella, too” --Jefferson Smith (James Stewart) in Mr. Smith Goes to Washington.
“Well, it’s far from good, but it looks damn good from far” --Mike Drake on a house painting job done, but not done well. See Amendment below….

Emolument Increase ( ...or “Pay No Attention to That Man Behind the Curtain”)

Noun– in short, the lawful gain, profit, or benefit which arises from holding an office. SEE ALSO: commission, recompense, remuneration, revenue increase, reward...

In historical law, the term “emolument” is connected to Article I, Section 6, Clause 2, of the United States Constitution and is most often referred to as the “Ineligibility Clause.” To oversimplify, the clause prohibits members of one branch of government (Executive) from serving in another (Legislative). For example, when Hillary Clinton accepted her current position as Secretary of State, she was forced to receive a pay cut of nearly $5000 for her new appointment because the office had experienced an increase in wages since Ms. Clinton had been in the Congress. In other words, Ms. Clinton might have been instrumental in increasing the pay for Secretary of State and then sought the office for monetary gain. (www.huffingtonpost.com.2008/12/11/hillary-clintons-pay-cut-_n_150302.html). In theory,
the clause prevents a member of Congress (or other political office) from setting a new and higher level of compensation and then securing that position for gain. The framers spent considerable time reconsidering and revising to get the clause correct, and even today it remains an ambiguous point of contention in determining the fairness of enhancements. Who would reach back into the early 1600’s to unearth such a concept? What kind of legal, labrynthine mind might find an advantage with such an idea?

Enter Speaker Madigan, stage right.
In May of 2012, both houses of the Illinois General Assembly, under the orchestration of Speaker Madigan and Senate President John Cullerton, passed a proposed Constitutional Amendment (HJRCA0049), which will be placed on the ballot for the general election in November of 2012, a mere six months from now. The amendment is designed, according to Mr. Madigan, to prevent “pension sweetners” without a three fifths (60%) approval of both houses. When asked, Speaker Madigan explained, “It [Amendment HJRCA0049] is intended to be tough medicine because review the actions of the Legislature and governors over the last several years…The record would say we need this medicine” (www.foxillinois.com/internal?st=print&id=147900555&path=/news/illinois). Of course, Speaker Madigan has been present and presiding for more-than-the-last several years as pension obligations went unfunded by the legislature. When one does enter stage right, good theatre demands an attractive protagonist, and Speaker Madigan has certainly cast himself as a man of action for the general public; however, some suspect that Madigan is once again “the master politician (creating) the appearance that he is doing something about pensions” (www.saukvalley.com/2012/05/09/speaker-hopes-his-amendment-fools-the-voters/all013a/). Governor Quinn may believe himself “put on earth to solve this pension problem,” but our Speaker is indeed the deus ex machina.

HJRCA0049 is an attempt to demonstrate Madigan’s own purpose and resolve in the continuing problem of the state’s consistent pension underfunding. In fact, such a constitutional amendment is probably pointless, except for show. Remember, after all, Madigan controls the House Rules Committee “with an iron hand” from which any pension increase bill must survive even to be considered (suakvalley.com), so the amendment to stop pension sweeteners is most unnecessary, but it looks so very, very proactive.

On the other hand, the proposed amendment may certainly prove very injurious to one smaller section of the captive audience: those younger professionals entering the field of teaching in Illinois after January of 2011. The planned amendment does herald continued fiscal pain for those tied to the Tier Two rack of paying 9.4% of their salary for their own pensions, far above the 6% that reflects the true return on their eventual pensions. Recall also that Tier Two teachers’ increased contributions are paying down the state’s earlier unfunded liability for payments not made since 1953. Should Illinois voters approve Madigan’s amendment in November, the likelihood of the General Assembly ever reducing its unfair, inequitable, and punitive payment for Tier Two pension contributions is not promising.

In a recent communication from Region 28, Addison Woodward warns that the abstruse wording of the amendment should raise alarm because“anything other than a salary or wage increase that could increase a pension or annuity would need a 60% vote supporting the increase from the governing body and/or both chambers of the General Assembly.” Indeed, vague and ambiguous wording within the proposed amendment is unsettling and likely to create an opportunity for an eager lawmaker to suggest that COLA’s fall outside the usual range of salary and wage benefits and are also to be considered emoluments requiring the 60% approval from both houses of the General Assembly (Woodward).

Several additional sections in the proposed amendment are quite disconcerting as a result of unclear and formless wording. “For purposes of this subsection, the term “emolument increase” means the creation of a new or enhancement of an exisiting advantage, profit or gain that an official or employee receives by virtue of holding office or employment, including, but not limited to, compensated time off, bonuses, incentives, or other forms of compensation” (www.ilga.gov. Full text HJRCA0049). Is the COLA a new enhancement? That depends on how a lawyer may wish to see it. It is certainly not new if one considers the three per cent cost of living as part of a continuing package that is an accrued benefit given to retirees when they end their careers. On the other hand, if each yearly compounded cost of living is considered a new enhancement, it will require a 60% approval of both houses of the General Assembly for currently retired teachers to receive that COLA. How will the courts perceive this argument? Hard to say? But rest assured, they will have to say...
And if the amendment does pass – and with phrases like stopping pension sweetners, why wouldn’t it? – what might also be up for a new interpretation? As Woodward warns again, the totality of Article XIII, Section 5 could be at stake. “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” (www.ilga.gov. Full text HJRCA0049). “It is this clause that many believe will be used to neutralize the pension protection clause” (Woodward).

In order to be approved, the amendment must receive a three-fifths approval by those voting on the proposed amendment in November or by a majority of those voting in the election. Some voters choose not to vote on amendments at all, while others choose to vote only on them; thus, the need for a fractional difference as per the Illinois Constitution (see Article XIV, Section 4). In sum, the amendment can be passed either of two ways, so it is imperative we educate our citizenry as to the inequities of the amendment.

Vote NO on HJRCA0049.
Are you worried yet? Do you need some heart, brains, or courage...c’mon just get involved.

"

Emolument by John Dillon (updated May 27, 2012)

2012-01-11T14:09:28.316Z

May 27th - Emolument

“I wouldn’t give you two cents for all your fancy rules if, behind them, they didn’t have a little bit of plain, ordinary, everyday kindness and a little looking out for the other fella, too” --Jefferson Smith (James Stewart) in Mr. Smith Goes to Washington.

“Well, it’s far from good, but it looks damn good from far” --Mike Drake on a house painting job done, but not done well. See Amendment below….

Emolument Increase ( ...or “Pay No Attention to That Man Behind the Curtain”)

Noun– in short, the lawful gain, profit, or benefit which arises from holding an office. SEE ALSO: commission, recompense, remuneration, revenue increase, reward...

In historical law, the term “emolument” is connected to Article I, Section 6, Clause 2, of the United States Constitution and is most often referred to as the “Ineligibility Clause.” To oversimplify, the clause prohibits members of one branch of government (Executive) from serving in another (Legislative). For example, when Hillary Clinton accepted her current position as Secretary of State, she was forced to receive a pay cut of nearly $5000 for her new appointment because the office had experienced an increase in wages since Ms. Clinton had been in the Congress. In other words, Ms. Clinton might have been instrumental in increasing the pay for Secretary of State and then sought the office for monetary gain. (www.huffingtonpost.com.2008/12/11/hillary-clintons-pay-cut-_n_150302.html). In theory,

the clause prevents a member of Congress (or other political office) from setting a new and higher level of compensation and then securing that position for gain. The framers spent considerable time reconsidering and revising to get the clause correct, and even today it remains an ambiguous point of contention in determining the fairness of enhancements. Who would reach back into the early 1600’s to unearth such a concept? What kind of legal, labrynthine mind might find an advantage with such an idea?

Enter Speaker Madigan, stage right.

In May of 2012, both houses of the Illinois General Assembly, under the orchestration of Speaker Madigan and Senate President John Cullerton, passed a proposed Constitutional Amendment (HJRCA0049), which will be placed on the ballot for the general election in November of 2012, a mere six months from now. The amendment is designed, according to Mr. Madigan, to prevent “pension sweetners” without a three fifths (60%) approval of both houses. When asked, Speaker Madigan explained, “It [Amendment HJRCA0049] is intended to be tough medicine because review the actions of the Legislature and governors over the last several years…The record would say we need this medicine” (www.foxillinois.com/internal?st=print&id=147900555&path=/news/illinois). Of course, Speaker Madigan has been present and presiding for more-than-the-last several years as pension obligations went unfunded by the legislature. When one does enter stage right, good theatre demands an attractive protagonist, and Speaker Madigan has certainly cast himself as a man of action for the general public; however, some suspect that Madigan is once again “the master politician (creating) the appearance that he is doing something about pensions” (www.saukvalley.com/2012/05/09/speaker-hopes-his-amendment-fools-the-voters/all013a/). Governor Quinn may believe himself “put on earth to solve this pension problem,” but our Speaker is indeed the deus ex machina.

HJRCA0049 is an attempt to demonstrate Madigan’s own purpose and resolve in the continuing problem of the state’s consistent pension underfunding. In fact, such a constitutional amendment is probably pointless, except for show. Remember, after all, Madigan controls the House Rules Committee “with an iron hand” from which any pension increase bill must survive even to be considered (suakvalley.com), so the amendment to stop pension sweeteners is most unnecessary, but it looks so very, very proactive.

On the other hand, the proposed amendment may certainly prove very injurious to one smaller section of the captive audience: those younger professionals entering the field of teaching in Illinois after January of 2011. The planned amendment does herald continued fiscal pain for those tied to the Tier Two rack of paying 9.4% of their salary for their own pensions, far above the 6% that reflects the true return on their eventual pensions. Recall also that Tier Two teachers’ increased contributions are paying down the state’s earlier unfunded liability for payments not made since 1953. Should Illinois voters approve Madigan’s amendment in November, the likelihood of the General Assembly ever reducing its unfair, inequitable, and punitive payment for Tier Two pension contributions is not promising.

In a recent communication from Region 28, Addison Woodward warns that the abstruse wording of the amendment should raise alarm because“anything other than a salary or wage increase that could increase a pension or annuity would need a 60% vote supporting the increase from the governing body and/or both chambers of the General Assembly.” Indeed, vague and ambiguous wording within the proposed amendment is unsettling and likely to create an opportunity for an eager lawmaker to suggest that COLA’s fall outside the usual range of salary and wage benefits and are also to be considered emoluments requiring the 60% approval from both houses of the General Assembly (Woodward).

Several additional sections in the proposed amendment are quite disconcerting as a result of unclear and formless wording. “For purposes of this subsection, the term “emolument increase” means the creation of a new or enhancement of an exisiting advantage, profit or gain that an official or employee receives by virtue of holding office or employment, including, but not limited to, compensated time off, bonuses, incentives, or other forms of compensation” (www.ilga.gov. Full text HJRCA0049). Is the COLA a new enhancement? That depends on how a lawyer may wish to see it. It is certainly not new if one considers the three per cent cost of living as part of a continuing package that is an accrued benefit given to retirees when they end their careers. On the other hand, if each yearly compounded cost of living is considered a new enhancement, it will require a 60% approval of both houses of the General Assembly for currently retired teachers to receive that COLA. How will the courts perceive this argument? Hard to say? But rest assured, they will have to say...

And if the amendment does pass – and with phrases like stopping pension sweetners, why wouldn’t it? – what might also be up for a new interpretation? As Woodward warns again, the totality of Article XIII, Section 5 could be at stake. “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” (www.ilga.gov. Full text HJRCA0049). “It is this clause that many believe will be used to neutralize the pension protection clause” (Woodward).

In order to be approved, the amendment must receive a three-fifths approval by those voting on the proposed amendment in November or by a majority of those voting in the election. Some voters choose not to vote on amendments at all, while others choose to vote only on them; thus, the need for a fractional difference as per the Illinois Constitution (see Article XIV, Section 4). In sum, the amendment can be passed either of two ways, so it is imperative we educate our citizenry as to the inequities of the amendment.

Vote NO on HJRCA0049.

Are you worried yet? Do you need some heart, brains, or courage...c’mon just get involved.

Civic Committee by Roger Sanders

2011-10-18T00:56:05.436Z

Pension on Point

TRS Funding 1991-2011

2011-09-25T15:09:28.954Z

We've attached an historical analysis of TRS funding since 1991, compiled by Kathleen Farney, Director of Research.