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Health & Fitness

Critical for Legislature to Act on Pensions on Tuesday

Though the proposal for Pensions hammered out by the Conference committee and Legislative leaders is not perfect,it is a significant and meaningful blueprint that members on both sides of the aisle need to embrace. I understand that the public employee unions are not happy with the proposal and claim it infringes on their constitutional rights and others  who believe it does not go far enough. I know many people will sit back and say that it is not their problem. The fact of the matter is that this is probably one of the most important votes that has been before our legislators in years, and indeed affects us all. Every day that goes by without a solution to our Pension black hole costs us millions and  impedes the ability of the legislature to act on a myriad of issues ranging from education and infrastructure  and transportation to safety net issues for residents of the state who need support. Moreover,  the unsustainable current system without change puts in jeopardy the very pensions that public employees rightfully have a concern about protecting.

This bill over next 30 years will  save 160 billion primarly from reduced cost of living increases(COLAs) without in any way impairing or diminishing the pensions that have been earned. The saving will come from the fact that the current 3% annual increases will only be allowed on a portion  of the pensions up to a particular amount based on actual years of service times $1000 which multiplier will increase with inflation. Though it would be desirable for retirees to get an annual cost of living increase on more of their pensions, and I understand that with a wife who is a retired teacher and a son who is a current teacher, and support the concept,the state needs to close the pension hole, and this is where they ended up after give and take on several concepts over the last several months as to where they needed to draw the line to get the job done in an actuarial  manner. This critical piece of the concept is prospective and only affects potential increases and therefore appears to measure up to the constitutional mandate not to diminish or impair the public pensions. In addition, the magnitude of the state’s current financial problems will indeed impair the current pension system which is not sustainable without significant change.

The bill will give a break to existing employees by reducing their pension contribution by 1 percent as consideration for raising the retirement age and eliminating COLAs for 1-5 years depending on age of current employees.The fact that the existing employees are getting consideration by the decrease in contribution is a tradeoff that helps those changes meet constitutional muster.The bill also guarantees the states obligations to the pension system so that the state can not take pension holidays and divert funds which contributed to the current mess. The bill also includes a voluntary 401K option to current employees who prefer to manage their own funds.

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The bill does not address similar needed changes for pensions that municipalities must fund; and that issue must also be addressed in short order.

The bill will reduce state pension contributions by close to 1.5 billion in its first year, which money is direly needed to pay the many months worth of backlog in  bills owed by the state and to meet other needs of the state which cannot be addressed while the pension quagmire sucks up a disproportionate portion of our state budget.

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Please join me in urging all legislators to have the political courage on both sides of the aisle to get the job done on Pensions on Tuesday. This is not a Republican or Democratic issue but an issue that must be resolved for all the citizens of the state including to those who may be pushing back on this proposal.

 

Elliott Hartstein

 

Former Mayor of Buffalo Grove and former Stevenson High School Board member

elliotthartstein@yahoo.com


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