When Jim Edgar Should Have Followed Missouri’s Example on Pensions

Headline about a hybrid pension plan in the State Journal-Register

The year the State of Illinois decided to improved the pension system of state employees, Missouri took action on its employee pension system, too.

The pension was quite poor compared to other states.

Governor Jim Edgar’s administration and the AFSMCE union agreed on a trade-off.

No raises for a year in return for a better pension.

Because I held the pretty meaningless (all GOP budgeting power was held tightly by Lee Daniels) title of Committee Spokesman on one of the too many House Appropriations Committees, I was invited to a meeting of those with similar titles in a small meeting room in the Governor’s part of the State Capitol.

When the proposal was announced, I brought up what Missouri had just done.

I was familiar with it because the Sunday St. Louis Post-Dispatch had run a story about it in its legislative round-up of what happened in the Missouri legislative session which had just ended.

And, what had Missouri politicians done?

They had gone from a defined benefit program to one in which half of retirement benefits were defined benefits (read pension) and half were to be derived from defined contributions (think 401(k) plans).

Not yet realizing the lack of a role I had in the meeting, I suggested it might be better to follow Missouri’s example.

That’s when I learned the deal had been cut and we were being told of it ahead of other legislators because of the alleged role we had in the budgetary process.

When I read one of the front page stories in Springfield’s State Journal-Register on Sunday before going to the Old Capitol Art Fair for a second time, one headline read,

Hybrid plan urged for pensions

It was a proposal by two University of Illinois professors, Jeffrey Brown and Robert Rich.

One of them said the idea had been presented.

The State Employee Retirement System was funded at 34.94% at the end of last June, so I guess Jim Edgar’s contract didn’t work out too well for taxpayers.


Comments

When Jim Edgar Should Have Followed Missouri’s Example on Pensions — 15 Comments

  1. Yet another example of Illinois political corruption with unions and political leaders making sausage.

    At least sausage has labeling requirements.

    Our corrupt Illinois laws have no such labeling requirements that a common taxpayer can read.

  2. Here’s the book you need about Illinois pensions.

    Illinois Pension Scam: How Politicians And Unions Conspired to Bankrupt Our Children’s Future.

    April 1, 2012

    By Bill Zettler

    Available on Amazon.com

    Chapter 1: How Did We Get Here? Excessive Pension Benefits Lead the Way.
    1.1 IL Pensions – More Than 130 Benefit Increases Since 1970 Are The Major Cause of Unfunded Liability.
    1.2 ERO (Early Retirement Option) – How Benefit Enhancements Drive Up Pension Costs.
    1.3 ERO (Early Retirement Option) – How the IEA + Politicians Plunder Taxpayers for $1 Billion.
    1.4 Retired Teachers Getting Pensions for 157,700 Years They Never Worked. Should This Be Guaranteed By the Constitution?
    1.5 Why Illinois Pensions Are In Trouble: $29,238 Gts You $3.5 Million in Pensions Payments.
    1.6 Pension Insanity: $75,000 Salary Turns Into $155,000 (Annual) Pension For One Kindergarten Teacher.
    1.7 Teacher’s 41% Salary Increase Costs Taxpayers $1.3 Million in Extra Pension Payments.
    1.8 Should Public Employees Have Annual Pensions Greater Than Their Career Pension Contributions?
    ……
    I’ll continue at a later time…

  3. 1.9 Should Part-Time Public Employees With Partial Careers Get Six-figure Pensions?
    1.10 Teacher Contributes Less For His $130K Pension Than You Do For Your Your $22K Social Security.
    1.11 Work For The State 5 Years, Pay in Zero, Get $130,000 Pension.
    1.12 $10 Million Pensions Are Here – Top 100 Will Payout over $700 Million.
    1.13 Four State Retirees Received Cost-Of-Living-Adjustments of More Than $10,000 in 2011.
    1.14 State University Top 25 Pensions Average $277,000 for 29 Years Work.
    1.15 $1 Million Payout To Two Teachers Proves Schools Should Pay for Pensions, Not the State.
    …..
    Chapter 2 will follow….

  4. Chapter 2: How Bad Is The Problem?

    2.1 QUESTION: How Much Do Taxpayers Owe for Unfunded State Pensions?
    ANSWER: No One Knows But It Is Certainly More Than The Oft-quoted $85 Billion.
    2.2 Taxpayers Have Contributed 230% More Than Teachers Since 2001
    2.3 Taxpayer Pension Contribution for Gov. Quinn in 2011: $140,000.
    2.4 Illinois Pensions: Rob The Poor and Give It to The Rich.
    2.5 We Are The $99K: Art Teacher Equates Her $99,000 Pension To Social Security.
    2.6 Teacher Unions Give Politicians $10′s of Millions in Contributions, Politicians Give Teacher Union Members $10′s of Billions in Compensation.
    2.7 Teacher Unions Say Pensions Are Too Low.
    Unions Think Top 25 TRS Pensions Should Be $82 Million Higher.
    2.8 Average State Pensions Are Far Above Average.
    2.9 Legal Corruption: Substitute Teaches 1 Day Gets $108,000 Pension From TRS.

  5. Chapter 3: Pension Mythology

    3.1 Pension Crisis: Politicians and Unions Lied To Us In 1995 And Have Been Lying To Us Ever Since.
    3.2 Pension Mythology: When The Going Gets Tough, Just Make Stuff Up.
    3.3 With 80,000 Unemployed Teachers in Illinois, WHy Don’t We Just Replace Any That Go On Strike?

  6. Chapter 4: You Cannot Control Pensions Unless You Control Salaries.

    4.1 You Cannot Control Pensions Unless You Control Salaries.
    4.2 Anatomy of a Teachers Contact: Blueprint For A Taxpayer Mugging.
    4.3 The Four Rules of Too
    4.4 Illinois Pays An Average Of 30 Times More Per Student For Superintendents Than Arizona.
    4.5 Wisconsin: Top Teacher Salary $89K Less Than IL Top Teacher, Top Superintendent $170K Less.
    4.6 IL School Administrators Make 67% More Than Wisconsin’s.
    4.7 If Public Employees Received Raises Equal To Yours There Would Be No Pension Deficit.
    4.8 Top 100 Teacher Salaries for 2011: Phys. Ed Teacher Heads List with $203,154.
    4.9 $800,000/yr. for Superintendents Past And Present At Just One School District. Retirement at 55 Instead Of 65 Increases Pension Payout By 69%.
    4.10 $138 Per Hour 2nd Grade Teachers Will Bankrupt The State.
    4.11 Unsustainable: $15,000/Month Average Teacher Compensation.
    4.12 Why Is Illinois’s Top Teacher Salary $109,000 More Than Kentucky’s?
    …..
    Chapter 5 coming later….

  7. Chapter 5: What We Need To Do To Solve The Problem
    5.1 Illinois Pensions and Intergenerational Theft
    5.2 Illinois $30 Billion/yr K-12 Cost Can Be Reduced Significantly
    5.3 Pension Reform Plan: Taxpayer Costs Must Be Fixed Not Unlimited
    5.3.1 Pension Reform Plan Part 1: Purpose, Reasoning and Implementation
    5.3.2 Part 2: How Pension Costs Can Be Allocated
    5.3.3 Part 3: What Happens If Agreement Is Not Reached
    5.4 Pension Solution: Retire the Pension Systems
    5.5 IL Professors Pension Reform Plan: More Of The Same

  8. Appendix A
    1. Pension Numbers Matrix
    2. Top 100 State Pensions (includes Top 25 K-12 And University Pensions
    3. Top 25 Politicians Pensions
    4. Top 25 State Employee Pensions
    5. Top 25 Judges Pensions
    6. Top 25 University Pensions
    7. Top 25 Teacher Retirement System Pensions

  9. Appendix B
    1. TRS Benefit Cost Increases vs. Teachers Contributions
    2. ERO (Early Retirement Option) Payments Over $200,000
    3. Service Credit Years Vs Actual Years Worked in IL
    4. $100,000 Pensions, Work 15 Years Or Less In Illinois
    5. Employee Contributions Versus ERO School Contributions
    6. Total School District Employee Cost Final Year Of Employment
    7. Service Credit Years Versus Actual Years Worked
    8. TRS Pensions Greater Than Final Salary
    9. 7% Per Year Increases At Avoca District 37 Teachers Contract September 10, 2010
    10. State Reitrees With Pensions Greater Than Contributions.
    11. IL Pensions More Than $100,000 Work 20 Years Or Less
    12. Projected $10 Million Pensions Using 30 Year Life Expectancy
    13. Annual Pension Contributions Assuming An 8% ROI
    14. TRS Taxpayer Contributions Vs. Employee Contributions 2000-2010
    15. Top Teacher Union Contributions As Of 12/31/2010

  10. Appendix B (continued)
    16. Top Individual Donations By Teacher Unions
    17. Donations By Teacher Union Affiliate
    18. $100,000 Teacher Union Pensions Paid For By Taxpayers
    19. Taxpayers Contribute 227% More Than Teachers 2000-2010
    20. Teacher Salary Increases Vs Social Security Salary Increases
    21. Decreased Pension Cost If Salary Increased By 5% Per Year
    22. Teacher Salaries By Subject 2011
    23. Bremen District 228 Superintendent And Pension Costs
    24. Top Grade School Teacher Salaries 2009
    25. Public Vs Private Sector Compensation BLS
    26. Pension Costs Best Case Scenario 2011-2045
    27. Top Pensions Stevenson Dist 225 Vs St. Libory Dist 30
    28. Compensation Defined And Possible Compensation Cuts
    29. $100,000 Salaries K-12 Employees 2001 Thru 2011

  11. The Players:

    Illinois Education Association (IEA)
    Illinois Federation of Teachers (IFT)
    Illinois Teachers Retirement System (TRS)
    Lawyers: Michael Madigan, John Cullerton, Pat Quinn
    National Education Association (NEA)
    American Federation of Teachers (AFT)

    The Book Cost $18 + $4 Shipping and Handling. Well worth the money. No doubt the unions will be attacking it to protect their pay an benefits.

  12. There should be a chapter on how politicians buy votes with your tax dollars as it directly affects pensions.

    Keep voting me in because I am incompetent and I will give you more benefits…screw our employer the taxpayers!

  13. Meaning Illinois Public Pensions (Teachers Retirement System, State University Retirement System, Judicial Retirement System, General Assembly Retirement System, and State Employees Retirement System) are guaranteed in the Illinois State Constitution to not be diminished or impaired through the 1970 Constitutional Convention.

    But there is no such guarantee for Social Security.

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