Why some already trying to undo pension changes

By Chase Castle
Posted4/11/2010 12:01 AM
  • 43rd District Representative Keith Farnham

      43rd District Representative Keith Farnham Mark Black | Staff Photographer

SPRINGFIELD - Extensive changes to Illinois pension systems aren't even law yet and already some lawmakers are trying to undo them.

In a single day last month, the Illinois House and Senate approved sweeping changes to future public sector employees' retirement benefits. The changes awaiting the governor's signature generally would force newly hired workers to stay in their jobs longer if they intend to max-out their pension benefits. Those workers also would receive smaller pensions than those received by today's public work force.

Over the next 35 years the changes could save taxpayers more than $100 billion. Gov. Pat Quinn, who has said he'll sign the pension change law, is counting on it saving $300 million in next year's budget plan.

Within hours and days of the proposal passing, however, lawmakers including Elgin's state Rep. Keith Farnham and downstate Rep. Raymond Poe were considering rolling back parts of the new provisions.

Poe, a Republican from Springfield, introduced legislation the very next day that would allow retirees to leave the work force and begin collecting full retirement benefits at age 62 and rather than stay on until the proposed age of 67.

Poe's Springfield-area district is home to thousands of state government employees, the next generation of whom would fall under the new retirement provision and have to work longer. He voted against the changes.

Poe said he took issue with the reforms because of the penalties for "early retirement." The approved changes still allow someone to leave work at age 62, but with a pension reduced by roughly 30 percent. To get the full amount due, they must wait until age 67.

"I think that if you're going to do that, they should go to defined contributions," Poe said, suggesting that state employees who work beyond age 62 should have their final years' contributions placed in a separate, personal account similar to a 401(k).

And Democratic Rep. Farnham believes the pension changes were rushed and hopes to follow up with legislation allowing teachers to retire earlier than age 67 with full pension benefits.

At an Elgin Area School District U-46 "Principal for a Day" event April 1, Farnham said he felt negotiations between legislators and local unions had made significant progress over recent months.

"I hope the conversation isn't over," he said. Farnham said he'd spoken to Illinois Education Association leaders about efforts to cancel parts of the proposal.

Naturally, public-sector employee unions don't like the changes either since their future members would be affected.

The unions, which can be influential in political campaigns, could make the changes an issue in upcoming races and this will assuredly be an issue in the coming decades. Early retirement plans have often been political tools for politicians seeking to win union support. Nothing in the pending law prevents lawmakers today or 40 years from now from rolling back the new requirements, so long as they can garner the votes to do it.

But for now, the legislative leaders who orchestrated the one-day pension overhaul don't appear interested in undoing their work.

Steve Brown is the spokesman for House Speaker Mike Madigan, a Democrat from Chicago. Brown said he can't imagine legislation passing that would reduce the retirement age, mainly because of the original proposal's overwhelming support. The changes were approved 92-17 in the House and 48-6 in the Senate.

"If anything, there are discussions about bringing similar reforms to other budgets," Brown said, referring to police and fire pensions which were not affected by last month's changes. "I think the idea would be to embrace all of the (pension) funds."

Daily Herald staff writer Kerry Lester contributed to this report.

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