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#PensionTheft: Public Workers Under Attack in Illinois

Vote in special legislative session in the state could see dramatic changes to the retirement packages of workers who say they upheld their end of the bargain

- Jon Queally, staff writer

(Image: AFSCME)A critical vote for past, current, and future public workers is set to take place in the Illinois General Assembly today and if Governor Pat Quinn gets his way and deep cuts are made to the pension and retirement rules, critics worry that similar efforts to strip workers of their earned retirement benefits will be replicated nationwide.

As in other states, Illinois pension shortfall comes not from over-compensating public employees but because the state perennially refused to contribute its share of revenue to the fund decade after decade. Now, according to Quinn and his supporters, the workers must be forced to endure cuts to their cost-of-living increases and other so-called "fixes" in the name of the "common good."

Quinn, a Democrat, is poised to anger his labor base in the name of compromising on the pension deal—which they call "pension theft"—and it is Republicans in the state who might ditch the deal, but only because they say the cuts to workers don't go far enough. Not all Democrats, however, see the deal as a responsible fix with U.S. Rep. Jan Schakowksy calling on her state-level colleagues to reject the proposal.

“Members of the Illinois General Assembly have been presented with an unfair pension proposal that places an enormous financial burden on those who did everything right – the public employees who served our state and faithfully made their pension contributions,” Schakowsky said in a statement. “Yet, this proposal would subject them to deep cuts on their cost-of-living adjustments, which will grow over time and substantially reduce their pensions. For the many teachers and other public employees who don’t collect Social Security, the size of the cuts will take away the retirement security they have earned over a lifetime of work.”

And the state's public employees (both current and retired) are not taking the initiative lying down. As the Associated Press reports:

Labor unions planned to turn out in force for a hearing Tuesday morning, where the committee was scheduled to discuss the legislation and hear from its supporters and opponents.

The unions say the measure is unfair to workers and retirees who for years made their required payments to the retirement funds, while the state did not. They also say portions of the plan violate a provision of the Illinois Constitution that says pension benefits may not be diminished. They plan to file a lawsuit arguing the measure is unconstitutional, if it is approved.

Dan Montgomery, president of the Illinois Federation of Teachers, told Reuters the plan is "a sweeping, unnecessary, crude attack on public workers."

And Anders Lindall, spokesman for the American Federation of State, County and Municipal Employees (AFSCME), called the legislative fix "a horror film" for workers.

And the local AFSCME Council 31 explained their objections:

  • The big hit, as anticipated, is to the annual Cost-of-Living Adjustment (COLA). It will begin to go down right away for all current retirees—and will be reduced by as much as 30 percent over 20 years of retirement.
  • Current employees will be hit by that same change to the COLA calculation—with the same loss of purchasing power over time when they retire.
  • In addition, the COLA will be frozen altogether for up to five years for any current employee when he/she retires. The retirement age will be raised by as much as five years for all employees under age 45.
  • To give this scheme a veneer of constitutionality, current employees will have their pension contribution reduced by 1%.

On Monday, workers staged protests inside and outside the offices of state legislators and planned to return again on Tuesday to voice their opposition outside the special session.

The term #pensiontheft was trending on Twitter as opponents voiced protest off-line and on.

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