Illinois union leaders bash pension plan as details emerge

CHICAGO Fri Nov 29, 2013 6:53pm EST

Michael Madigan, speaker of the Illinois Representatives, listens to the State of the State address in the House Chambers of the Illinois State Capitol in Springfield, Illinois February 1, 2012. REUTERS/Sarah Conard

Michael Madigan, speaker of the Illinois Representatives, listens to the State of the State address in the House Chambers of the Illinois State Capitol in Springfield, Illinois February 1, 2012.

Credit: Reuters/Sarah Conard

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CHICAGO (Reuters) - Illinois union leaders on Friday criticized the details of a controversial deal to reform the state's woefully under-funded public pensions, as legislative leaders revealed more specifics of the deal they reached on Wednesday.

The agreement contains proposals to raise the retirement age and reduce automatic increases in pension payments, according to an overview of the bill released by the office of powerful Illinois House Speaker Michael Madigan.

Union opponents of the plan say it is little changed from a Madigan-backed proposal that was overwhelmingly defeated by the Illinois Senate earlier this year.

"It's a bad rerun of a movie that we saw months ago and for public servants and retirees, it's a horror film," said Anders Lindall, spokesman for the American Federation of State, County and Municipal Employees (AFSCME).

Under the deal, the retirement age for workers who are currently aged 45 and under would gradually increase. And for high wage earners, the state would set a cap on the portion of their salaries used to calculate pension benefits, according to the overview issued by Madigan's office.

The current 3 percent annual cost-of-living adjustment (COLA) for retirement pay, which is compounded annually, would be subjected to a formula aimed at benefiting longer-term, lower-earning workers. Increases would be tied to the inflation rate.

At the outset, cost-of-living increases would be suspended for anywhere from one to five years, depending on the age of the worker.

AFSCME's Lindall said the cuts to the COLA would reduce the total value of a typical retiree's pension payments by some 30 percent over 25 years of retirement.

Union leaders had questions about some aspects of the deal, including a provision to prohibit collective bargaining on most "pension matters."

In the only pension-related issue that still could be resolved during talks, teachers can continue to negotiate with school districts to make contributions to their pensions in lieu of salary increases.

It was unclear exactly which "pension matters" would be included under the ban, said Dan Montgomery, president of the Illinois Federation of Teachers.

"It's a sweeping, unnecessary, crude attack on public workers," he said about the plan.

The Illinois Senate and House are expected to take up pension reform next week.

(Editing by Chizu Nomiyama)

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Comments (20)
C’mon, everyone knows it is a Human Right to retire at age 48 with full pension and health benefits.

Nov 29, 2013 7:17pm EST  --  Report as abuse
dankosh wrote:
congratulations to the public employees of the virtual democrat world of obamaland. I think it’s time for the whole country, legal and illegal, to enjoy the same wages and benefits as Illinois public employees.

Nov 29, 2013 9:08pm EST  --  Report as abuse
TheNewWorld wrote:
Public service unions should not exist. FDR even agreed with this. It is a huge conflict of interest when you can vote for a person(s) that have control over your pay and benefits. These unions and their elected cronies have effectively bankrupted many municipalities across the US. They could care less about the communities or their neighbors who have to pay for their retirements. As seen in Detroit, they split the first chance they get to other communities. But how dare you try to take away their benefits that they worked so hard for by voting for politicians that would turn around and promise your tax dollars in turn for those votes. The union members have pensions promised, the politicians that gave them the pensions have pension promised, and you, the tax payer who pays for those pension was never even invited to the bargaining table.

Nov 30, 2013 2:58am EST  --  Report as abuse
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