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Lawmakers buck leaders with their own pension plan

Published: Thursday, Dec. 13, 2012 1:15 a.m. CDT

Springfield has a mother-may-I culture in which major legislative initiatives are not launched without the blessing of one of the caucus leaders. 

When I first started covering the Illinois Legislature 24 years ago, I was amazed to see a legislative staffer standing in front of the House chamber miming how members should vote.

When the speaker of the House wanted an “aye” vote, the staffer would point at his eye; when the vote was “no,” he would point at his nose.

The members would follow suit.

I haven’t seen instructions given quite that flamboyantly for awhile, but make no mistake – legislative leaders run things.

That’s why I found the actions of state Rep. Elaine Nekritz, D-Des Plaines, remarkable.

She managed to get at least 20 House members from both parties to publicly support a pension reform bill that she hammered out.

“We have a choice between bad and worse,” Nekritz told me in an interview Thursday. “This bill is not fair to government workers, but we have to do something to solve this problem.”

The problem, of course, is our woefully underfunded pensions.

Another way to look at the fairness issue is that it is better to have a solvent pension system than an insolvent one.

And if we want to talk fairness, it’s not fair that Illinois politicians foisted a 67 percent income tax increase on us to pour into a failing, unreformed pension system.

After all, it’s the politicians – not the taxpayers – who were the architects of this debacle.

It’s encouraging that Nekritz showed gumption and worked independently of legislative leaders.

But her plan doesn’t solve the problem.

In fact, it may end up perpetuating many of the problems that got us here in the first place.

Nekritz’s plan eliminates compounding for the cost-of-living adjustment, or COLA, for some lawmakers.

But it keeps compounding COLAs for the state’s other four pension systems.

For most employees in state pension systems, Nekritz’s plan would limit cost-of-living pension increases to the first $25,000 of individual employee’s pension.

And that doesn’t make much sense.

After all, it’s these COLAs compounding upon themselves that are one of the biggest drivers of the state’s expanding pension obligations.

The plan also calls for increasing employee pension contributions by 2 percentage points. While it may be inevitable that employees will need to pay more, why make them pay more into a broken system?

But here is the really perplexing thing that Nekritz claims – that her system supposedly combines “the best features” of defined-contribution, or 401(k), plans and defined-benefit, or pension, plans.

It doesn’t.

It’s still a pension plan, and the taxpayers would still be on the hook.

In fairness, Nekritz freely admits it’s a work in progress.

“The plan is to vote on this in January,” Nekritz said. “I don’t anticipate the leadership will stand in the way of that happening.”

We’ll see.

Note to readers – Scott Reeder’s column is underwritten by the Illinois Policy Institute.

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