‘No way’ pension committee can meet deadline, chairman says
BY DAVID ROEDER AND DAVE McKINNEY Staff Reporters July 3, 2013 1:40PM
State Sen. Kwame Raoul (D-Chicago), the chairman of a legislative committee working to forge a compromise on Illinois' $97 billion pension crisis, speaks during a public hearing in Chicago in June. (AP Photo/M. Spencer Green, File)
Updated: August 5, 2013 6:27PM
The chairman of a state House-Senate conference committee on pension reform said Wednesday it won’t meet Gov. Pat Quinn’s deadline for action next week.
State Sen. Kwame Raoul (D-Chicago) said there is “no way to get this done” by Tuesday, the date of a special legislative session on pensions that Quinn has called. Raoul heads a 10-member committee charged with finding ways to reduce the state’s estimated $100 billion pension liability.
Raoul said the panel needs time to get estimates of cost savings from various proposals for pension restructuring.
But a spokeswoman for Quinn said all the estimates have been continually updated for months and that the committee just wants to put off a tough vote. “We’ve been providing estimates from the actuaries and having these discussions for two years now. The legislators know what they have to do,” said spokeswoman Brooke Anderson.
“We’ve given them all the ingredients and every time there is another excuse,” she said. Quinn has torn into the General Assembly for not passing pension reform during its regular session. He also criticized the House-Senate panel for waiting eight days after it was appointed to hold its first meeting.
“The deadline stands,” Anderson said. “It’s an emergency.” Quinn, however, cannot force a vote.
At the end of a public hearing Wednesday, the bipartisan committee broke into two caucuses to select which recommendations to forward to state actuaries. It is expected to seek input from the state’s Commission on Government Forecasting and Accountability.
The committee is scheduled to reconvene at 3 p.m. Monday in Springfield.
Much of Wednesday’s hearing was devoted to a proposal to stabilize pensions for employees of Illinois public colleges and universities. The plan by five academics has the support of the State Universities Retirement System, one of the six pension plans for state workers.
It’s also gotten interest from Senate President John Cullerton (D-Chicago), and elements could be applied to the other pension plans.
It calls for reducing the current 3 percent annual cost-of-living increases for retirees to half of the prior year’s change in the Consumer Price Index.
On a gradual basis, the universities and colleges would be required to pay into the pensions for the first time, shifting the burden from the state. After a 12-year transition, the schools would be paying the entire 6.2 percent contribution.
Current employees would chip in an extra 2 percentage points of their pay, bringing their contribution to 10 percent.
“This is shared sacrifice in every aspect,” said Glenn Poshard, president of Southern Illinois University.
Poshard told legislators that of the myriad challenges the state faces, “none are even close by comparison to the on-the-verge failure of our pension system.” He said the predicament makes it hard for state schools to recruit top researchers and professors.
The proposal would leave the state responsible for paying off the estimated $19.3 billion liability of the universities retirement system.
It also calls for enrolling new employees in a retirement plan that combines a traditional pension with a system similar to a 401(k) that private employers use.
“We decided that we have to be responsible to propose something to you that on balance saves the system,” Poshard said.