PENSION: Illinois SB 2404 provides for guaranteed pension funding. Plus 2%

--Finally!!!! A pension bill that actually starts addressing the fixing of the problem in a fair manner.--
Duke

From the Fred Klonsky Blog

IFT President Dan Montgomery

There’s an important development happening in Springfield. As you know, together, we’ve been fighting back attacks to our pension security for the past several years. Your advocacy has provided a tenacious defensive line, and it’s because of you that we’ve been successful.

Now it’s time to play offense.

Late last week, State Senators Linda Holmes (D-Aurora) and Pam Althoff (R-McHenry) filed Senate Bill 2404, legislation that includes key components advocated by the IFT and We Are One Illinois labor coalition. In large part, this fair, constitutional bill provides a path to paying down the pension debt that, as you know, neither workers nor our modest retirement benefits are responsible for causing.

We support this legislation, which addresses three of our key priorities:

1. Guaranteed Funding. You’ve always paid toward your retirement. The state has not. Decades of skipped and shorted payments have created a $90 billion debt and a serious crisis. This bill secures an ironclad promise that lawmakers must make the annual pension and debt payment every year. And, SB2404 establishes the right for the state retirement systems – or individuals – to bring court action if they don’t.

2. Creating a Pension Stabilization Fund. Beyond paying the annual costs, the state must also pay down the massive debt. In past years, Springfield leaders used creative borrowing schemes to make payments, which only created more debt through bonds that had to be paid off first by law. SB2404 would create a constitutionally protected fund to directly pay down the debt with resources already in the Illinois budget.

3. Shared Sacrifice. While public workers are not to blame for Illinois’ pension problem, we are willing to be part of the solution. With an ironclad funding guarantee to ensure employer underfunding can never happen again and the dedicated revenue source described above, active members would contribute an additional 2 percent of salary, phased in over the next two years. This will generate more than $3 billion over the next decade.

In the weeks ahead, organized labor aims to add more co-sponsors to this bipartisan legislation. We believe there is an appetite to support an initiative with the union coalition’s backing.

This bill is just one piece of the puzzle. We will continue to work on solutions for retiring the debt and finding new revenue (by closing corporate tax loopholes, for example).  We have always held that the pension crisis is a fiscal one and that revenue must be part of the solution.

Like you, we’re looking forward to a fair resolution so we can better focus on providing our children with a world-class education and our citizens with great public services.