Op-Ed: Illinois Should Honor Current Pensions

Cutting the retirement benefits earned by state workers is unconstitutional and fundamentally unfair.

By Michael T. Carrigan

May 6, 2011 

"I do solemnly swear that I will support the Constitution of the United States, and the Constitution of the State of Illinois, and that I will faithfully exercise the duties of the office …"

— Oath of office taken by every member of the Illinois Legislature

Call me old-fashioned, but those words still have meaning. When Senate President John Cullerton asked his chief counsel, Eric Madiar, to research the issue of the constitutionality of changing pension plans midstream for current teachers and other public employees, Madiar was not given a specific policy goal. His charge was to let the research direct the outcome.

The result of months of research on the constitution's pension clause is a 76-page report that concludes "the General Assembly cannot unilaterally cut the pension benefits of current employees as a means to reduce the state's existing pension liabilities based on the clause's plain language, the drafters' original intent, voters' understanding of the provision, and court decisions construing the clause."

It is the most exhaustive work to date on the issue.

You can find the full report at illinoissenatedemocrats.com. It lays out Madiar's compelling case against cutting benefits, including increasing contributions for current members of the systems. It includes excerpts from the 1970 Constitutional Convention, at which time the provision was adopted.

Unfortunately, instead of trying to find real solutions, many observers suggest the constitutionality issue should be decided in the courts. Here's why that is a bad idea.

First, it will trigger a multiyear, multimillion-dollar lawsuit that will delay the state from addressing the pension funding problem. There are real solutions that don't take away what is in many cases the life savings of participants of these systems, like restructuring the current debt to a lower interest rate. This change alone could save several hundred million dollars for Illinois taxpayers.

Second and more important, there is no reason to trash them. Illinois public employee pensions are modest — just $32,000 on average. Public employees pay significantly toward their own retirement — in most cases, 8 percent or 9 percent of every paycheck. And nearly 80 percent of Illinois public employees aren't part of the Social Security system — including Chicago and Cook County employees, as well as firefighters, teachers, police officers and university employees statewide. That saves state taxpayers money — nearly $1 billion per year it doesn't pay in federal taxes. And it means those workers are entirely dependent on their pension earnings for security in retirement.

So what's the problem? For years, lawmakers didn't make required payments to the pension funds, running up a sizable debt, even as public employees paid their share. It's unacceptable to suggest that working people suffer for politicians' misdeeds.

Everyone deserves a decent retirement and some kind of retirement safety net. For most private-sector workers, that safety net is Social Security and a 401(k) plan — a package more costly to the employer than what public employee pensions cost the state.

Cutting the modest pensions earned by those who paid for them — most of whom will never qualify for Social Security — is unconstitutional and fundamentally unfair. Teachers or nurses, firefighters or police officers, they are public servants who pay for and depend on the pensions they earn. In return Illinois has an obligation to honor their service, and keep its promises.

Michael T. Carrigan is president of the Illinois AFL-CIO.