SPRINGFIELD — Illinois lawmakers are trying to close pension loopholes — they created — that are allowing union leaders to cash in on public pensions.
By Benjamin Yount
SPRINGFIELD — Illinois lawmakers are trying to close pension loopholes they created that are allowing union leaders to cash in on public pensions.
Legislation from state Sen. Matt Murphy, R-Palatine, and House GOP Leader Tom Cross, R-Oswego, targets these labor leaders who are collecting taxpayer-guaranteed pensions based on the time and salary they acquired while working for their unions.
Dave Commerford, spokesman for the state’s largest teachers’ union, the Illinois Federation of Teachers, said the union is “reviewing the legislation and has no further comment at this time.” Calls to the other major teachers’ union, the Illinois Education Association, were not returned.
Murphy’s proposal, Senate Bill 2499, takes action against education union leaders with the IFT and IEA as well as the Illinois Association of School Board, an organization that helps school boards with professional development and is indirectly funded by taxpayers.
The proposal seeks to prevent the leaders from using their jobs with the unions or association to pad a pension they earned inside a classroom or school building.
“The most glaring examples of what we’re trying to get to, frankly are in the Teachers’ Retirement System, where you have individuals who have worked for years for a union, who are using their time in the union and their final salary from the union, to set their public pension,” said Murphy.
Murphy is quick to point to Reginald Weaver, former head of the country’s largest teacher union, the National Education Association, who is collecting $242,000 annually based on his salary working with the union. Weaver earned just $60,000 as a middle school teacher in 1996 in Harvey, Ill.
An investigation by Illinois Statehouse News found that 119 union and nonprofit leaders are eligible for taxpayer-guaranteed pensions. Sixty union officials and other non-governmental workers are collecting those pensions.
“These union leaders have been paid handsomely through teachers’ dues for year, and were supposed to have the backs of these rank-and-file teachers,” Murphy said. “This individual, Mr. Weaver, is taking out six times as much as the average teacher from their very pension fund.”
Weaver and other labor leaders in Illinois are taking advantage of vague language in a 1991 law that allows union leaders to maximize their pensions by basing their taxpayer-backed retirement income on their salary and years of service in their unions. That law was enacted under former Republican Gov. Jim Thompson’s administration.
Murphy, however, said closing the 1991 loophole will require help from Democrats who control state government.
“My hope is that my friends on the other side of the aisle will recognize the need to address, not only a fairness issue with this, but also the cynicism from taxpayers toward their government for even allowing this type of insider deal,” Murphy said.
State Rep. Dan Biss, D-Evanston, is leading a House working group on pension reform. However, Biss didn’t comment Wednesday on Murphy’s legislation or any other pension-reform measures that may go before the General Assembly.
“We want to have open and honest discussions at this point,” Biss said.
Cross said he plans to ride the coattails of stories from the Chicago Tribune and WGN television in Chicago that highlight union leaders who have used the 1991 loophole to force pension plans though the Legislature.
“Unfortunately, top union officials used a questionable interpretation of the pension law that allowed them to use a loophole in to grab two or sometimes three pensions,” said Cross.
Cross’ proposals include:
- House Bill 3832 would bar union leaders from avoiding criminal charges of pension fraud if they are collect union and City of Chicago pensions.
- House Bill 3827 would replace members of the City of Chicago and Cook County pension boards to promote accountability to taxpayers.
- House Bill 3813 would repeal a portion of the 1991 law that allows City of Chicago employees to retire with a city pension based on their higher union salary. The bill would allow union officials to accept a city pension based on their city salary when they left public service.
“You should only get a public pension for public work,” said Murphy of the measures.
Adam Andrzejewski, a former GOP candidate for governor and founder of the taxpayer advocate group For the Good of Illinois, which calls for “limited, accountable and transparent government,” said most people statewide would agree that public pensions should be only for public work.
“This legislation defends the hard-working public employee, the hard-working teacher who pays into their (retirement) system,” said Andrzejewski. “The systems are, literally, being drained by tens of millions of dollars from non-government entities like public-sector unions (and) the nonprofit groups.”
As a public sector employee, I applaude the efforts to stop this. Pensions are our retirement. For these people to be able to have these types of pensions damages the public views of the system. If there were less of these stories, our pensions would not be looked upon the way they are. Keep pensions for the hard working public employees. Not for abusers and loophole fillers!
Unless things have changed, and correct me if I'm wrong, pensions are not guaranteed by anyone, not the Feds, not the State and certainly not the company one works for. Historically, when a company gets into financial trouble, the pensions are drained. I've been working a long time and have seen this happen many times. One family member worked for an airline, retired and, instead of taking her money out, she left it in the hands of the company. Well, we know what happened to some airlines, before she knew it, the money in her pension fund was gone.
We keep being told there's no money left in Social Security … why? Because it was too tempting for LBJ and he decided to raid it … and that's been happening ever since.
The State and the city of Evanston is going broke … do you really believe they won't, or haven't, raided the pension fund? You're living in a dream world if you do.
If you're lucky enough to retire w/a pension and have the opportunity to take all of your money out … do it. It would be better to know that you have it in a savings account than consider it 'safe' w/government – and that's any government. So you take a tax hit … so what. That's better than having nothing.
The only retirement money you have is the money you save for yourself…if the banks don't fail … there's no guarantees.
I've never understood union employees. They allowed the unions to intentionally put them into that unreliable and untenable position, they see the union leaders continually scamming their money and damaging their reputation, they know politicians pass legislation that enables the leadership to commit the scams, and then watch the union fund those same politicians with their very own money. And yet they do nothing to demand change.
Instead, like in Wisconsin, they protest to support the very organization that put them into such an obviously bad situation and support the politicians who helped craft their unfunded futures. I'm not a union member, if I were, I'd be really angry, and not with Republicans, or the taxpayers attitude of having had enough. I have no sympathy for union employees, they allowed the nonsense to continue in what is supposed to be "their" organization.
Actually, public pensions ARE guaranteed by the Illinois constitution. There is a lawful duty for the participants and the employers to fund those pensions.
As far as the city raiding the pension fund, you are 100% correct. For years the city underfunded their portion of contributions. The years of not funding at proper levels and then having less interest paid on the lower contributions got the city into the mess they are in today. By the way, not all of the cities pensions are under-funded. The police and fire pensions are the only funds that are behind. The other city pensions are 100% funded (city managers, and all other's), by state law. The police and fire pensions were not required to be fully funded for a long time. Now that debt is due, and the city is looking for a way to back out of their part of the contract. Had they made the right decisions years back, there would not be this issue. But, when you "borrow from Peter …". The employees of these two pensions have made their contributions faithfully so the blame solely lies with our past elected officials. I will applaud the current administration for finally recognizing the problem and trying to deal with it. However, the men and women who have served this city for years, and the tax payers are now left to deal with the past mismanagement.
Do not blame the employees for wanting what was promised to them – blame the people who fiddled while Rome burned. We SHOULD be outraged that our taxes are going up, but blaming the people with the pensions is not the answer. They were promised these benefits in agreement for their service. It was the foolish behavior of past city councils who are 100% responsible for this mess. However, they have no responsibility to the tax payers of today. Shame on them!
Government pensions have always been rife with abuse
If bankruptcy is declared not even the state Constitution can save the pension system – a system that has always been unsustainable.
Our former fire chief earned a six figure salary and just retired at age 53 with a six figure annual pension for life. Well, he's not retired, he just landed another job as fire chief of Winnetka, earning another six figure salary and is eligible for another pension in 10 years.
The exact same thing happened with our recently retired police chief, now the Park Ridge police chief.
Why do you think taxpayers have a "lawful duty" to support a pension system that is rife with abuse, spiking and double dipping?
Based on what our fire and police chiefs just did – yes, I blame the employees as much as the Democrat politicians who nurtured and encouraged this chronic government union pension chicanery.
Serial pensions, not “double-dipping”
The "abuses" you accuse the former police & fire chief are nothing sinister, and certainly not illegal. After 30 years of service, their pension benefits were maxed out–and every year they continued to work in their original positions would obligate them to continue to pay additional money (roughly 10% of their salaries) into a pension system with zero additional retirement benefits. Serial pensions may stir a certain level of envy and frustration in those who don't qualify for them, but at least these individuals are earning (and paying for) their new benefits.
The real abuses are those tricksters who game the system by "accruing" multiple pensions covering the same period of employment. While these individuals may "legally" be enrolled in both municipal and union pension plans simultaneously, this double cost to the taxpayer is unconscionable.
Now, should workers who "qualify" for multiple pensions for the same employment period be required to "choose one" and ignore the others? Maybe. Similarly, should "retiring" chiefs (or other qualified pensioners) be required to opt out of any future pension earnings, and instead enroll in some other retirement package, such as a 401K? Again, maybe so.
Next steps? How about getting "fuzzy" legal opinions squared away with sensible legislation, instead of painting every pension collector as a greedy, tax-stealing villain?
(Also AA, remember that none of YOUR taxes are paying for those ex-chiefs' new salaries or pensions, ok?)
If pensions were pro-rated on the basis of working years [not the 20 or 30 government bodies use] so that a working life was taken as 24 to 66, then the problem would be solved. Not a linear, nyperbolic or exponential growth in pension benefits, but something in-between.
Police and firemen do have a dangerous life [more than high rise construction ?] but they should recognize that and prepare for life after their body can no longer enable them to do beat jobs or fight fires. E.g. desk command, management, consulting, private detective work, get an MBA or law degree or other continuing education.
Even football players recognize they have to prepare for the future and get MBA, law or other education while playing or figure out what type of business opportunities they could have.
Please, the whole idea was to push off the pension responsibility to the taxpayers of tomorrow, call the pensions constitutionally guaranteed to assure the workers, then allow the politicians to kick that can down the road thereby enabling relief to both the elected reps and the union leadership of ever having any major responsibility for delivering results on their promises.
It's so easy now for union leadership to blame past politicians for their shortcomings, union leadership can sit back and say it wasn't our fault. I mean seriously, what kind of fool hasn't seen this coming for decades? It was built as a system by intentional design and leaves both the taxpayer and the worker to shoulder the shortcomings while certain politicians get cash contributions today and union leaders take care of themselves with exaggerated pensions tomorrow, all taken from the very funds that were contributed by and for the average worker.
I don't begrudge any hardworking employee their pension and feel bad that very many may not get what was promised them, but I do blame them for allowing the systematic charade to be perpetuated with no demand for change. Again, why they support that leadership and the parasitic political shenanigans that enables that leadership is a wonder. After all, it is supposed to be "their" union.
Recall that the police pension fund sued the city some time ago for not funding. This is no new epiphany. NB only the police and fire pensions are underfunded. City employees are funded. Hmmm?
Pension value in the Future
Union employees should want to have their pensions converted to 401-k plans for their own benefit.
Pension cost will lead to them being worthless as government and companies can't afford them—for new employees and even those who have them now.
With 401-k they can direct their investments and know the money is theirs and not the 'promise' of a body than may no longer exist or be bankrupt and have no way to pay the pension. If they think the government will be able to bail them out—which government ?—they are dreaming.
Re; Pension blame
The pension boards did do something about it – They sued the city. The court ruled the city could pay now, or pay later, but they had to pay either way. The city chose to pay later (which is now) …. So, the unions and pension boards did all they could – trying to warn the city about the dangers of pushing the issue off on the later city councils. The city made a conscious choice to not keep up their payments. So please do not suggest anyone but the city manager / city counsel had anything to do with the current situation.
Leave a comment