See a powerful message below from Senator Toi Hutchinson of Olympia Fields and Illinois’s 40th Senate District. GSU is located in Sen. Hutchinson’s district.
December 5, 2013
Earlier this week, I voted no on Senate Bill 1, an overreaching slashing of retirement benefits for working men and women and retirees.
Adding insult to injury, I am entirely convinced that this plan is an obvious violation of the Illinois Constitution.
The state needs to control its spending, including its pension spending. But it’s unfair and immoral to go raiding retirees’ savings to do it.
All top policymakers agree that the employees did nothing wrong, so insisting that they bear the brunt of fixing a crisis caused by political irresponsibility is unacceptable.
I will continue standing with working men and women and retirees to ensure a fair and balanced plan is crafted.
Below are several provisions in the bill (with information provided by the bipartisian research firm CTBA) that I feel made this effort to reform pension funding immoral and unconstitutional:
1. Change to COLA
- Retirees’ benefits will not keep pace with inflation over time since only part of their benefit will be tied to inflation. This is a direct reduction of benefits which is specifically barred in Section 5, Article 13 of the Illinois Constitution.
- The monetary difference between the pension benefit under current law versus the proposed changes increases over time, meaning the longer a retiree lives the worse off they are. This will create a larger pool of impoverished retirees who will then have to rely on Medicaid and other social services to fill the gap at exactly the time when social services continue to suffer devastating cuts.
- Reduction in retirement benefits is occurring at the same time as retiree health care is being changed.
2. Changes to the state’s funding
- Salary cap may violate Federal Insurance Contributions Act (according to Buck Consultants, the company used by TRS for their actuarial services). FICA requires the state to provide a benefit that is at least equitable to Social Security. This same thing was an issue with an earlier version of the pension bill. Eighty percent of TRS retirees do not participate in Social Security. Their pensions are all they have.
- The so called “funding guarantee” allows future lawmakers to vote to change the payment schedule and reduce the annual payment if they so choose. This is the very thing that caused the crisis in the first place.
During the 1970 constitutional convention, the intention of the delegates was explicitly stated. They wanted to enshrine in the constitution that the benefits that workers agreed to as a condition of employment would be a contractual agreeement between the State and the employee. They wanted to ensure that public employees had a basic protection against abolishing their rights completely or changing the terms of their benefits after they’re hired.
They knew that there would be a day in the future when the state would be in crisis and they would not be able to rely on the wisdom of the legislature if they determined that the easiest course of action would be to raid the pension fund. For decades, that is exactly what happened. This past Tuesday, December 3, was the day they knew was coming in 1970.
I look forward to listening to what our courts have to say about these reforms. In the meantime, I will continue working toward a solution that includes fairness and justice for the very people affected by this legislation. Workers who earned these benefits over the years deserve nothing less than what was promised.
To hear my comments during the floor debate about this issue, click here.
Thank you for your time. I encourage you to visit my website to stay updated on this issue and the many others facing Illinois.
Senator Toi Hutchinson
40th District – Illinois
Chicago Heights Office
222 Vollmer Rd. Suite 1D • Chicago Heights, IL 60411
708-756-0882 (Phone) • 708-756-0885 (Fax)
121C Capitol Building • Springfield, IL 62706
217-782-7419 (Phone) • 217-557-3930 (Fax)