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posted: 12/20/2013 5:00 AM

Reform pensions, but leave retirees alone

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The recently passed "pension reform" bill contains a number of curiosities with respect to its harsh treatment of retirees. First, one cannot find an offsetting benefit for the severe reduction of the annual 3 percent compounded COLA increases that were intended to keep retirees "whole" as they aged and as inflation soared. Similarly, one cannot find an offsetting benefit to those retirees with outsized pensions that will now be capped at about $110,000 per year. No one will care about the wealthier retirees, but they too must be provided with a different, offsetting, benefit if the pension changes are constitutional. While the bill's reduction of contributions for those still working is an offset, that does not benefit retirees as all.

Second, those state retirees who happened to qualify for Social Security (by virtue of mostly private sector work before, during or after public employment) get the shaft for the second time. That group will have their reduced COLA further reduced by another 20 percent. So when a state employee files for Social Security, they are told that their benefit from that system will be reduced by about 50 percent because of the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP). These rules say that if one has a public sector pension they can't have their full Social Security benefit.

Now, Illinois retirees are told that they will have their state pension COLAs further reduced because they get a small Social Security check. So, if one worked under the state system, they lose part of their federal pension (Social Security); and if one worked under the federal system, one loses part of their state pension. This makes no sense whatsoever and as if unfair.

Pension reform is surely needed. There have been abuses that must be corrected going forward. However, a better and constitutional bill would leave the current retirees alone. The year's long vilification of taxpaying retirees (who contributed 8-11.5 percent of their checks each pay period) and did nothing to cause the pension mess, is tiresome and unconscionable.

Charles F. Falk


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