Sweeteners have been the pension problem
In his Dec. 21 letter [Government’s promise dashed by ‘reform’ law], Mr. Harold Hunt claimed: “There is, and never was, anything wrong with the pension system that needed reform. The only thing wrong is the Legislature for several years decided not to fund it.”
State pension funding has increased from 3 percent of general fund spending in 1995 to 19 percent of general fund spending in 2014 (even with the 67 percent income tax hike). How much would be enough, Mr. Hunt?
Mr. Hunt bemoans the small pensions given to hundreds of retirees; but how much pension should the 3,410 retired teachers receive for working less than 5 years?
Despite a quadrupling of state funding since 1998, the funded ratio of the pension systems has declined from 74 percent in Fiscal Year 2000, to only 39 percent in Fiscal Year 2012.
The problem with the pension system is not a lack of state funding; the problem with the pension system is that benefits have exceeded contributions every year since 1999 (excluding the pension bonds of 2003), mainly because of pension sweeteners (increased COLAs, new benefit formulas, early retirement incentives, pension spiking).
Whether pension reform is constitutional or not is up to the courts; but pension clause co-sponsors Helen Kinney and Henry Green both explained to 1970 Constitutional Convention delegates that “if the benefits are $100 a month in 1971, they should be no less than $100 a month in 1990.”
No one’s pension is being cut. With this legislation, Dr. Leslie Heffez, a retired UIC dental professor, will receive his $43,034.31 benefit check every month in 2014, and his pension benefit will be even more than that in 2034.
It sounds like this legislation passes the constitutional litmus test presented by the sponsors of the pension clause.