Wednesday, October 3, 2012

SIU SUAA: Tough Answers on Pension Questions

Title: Tough answers on pension questions
Author: D. W. Norris
Publication: The Southern Illinoisan
Date: September 29, 2012

CARBONDALE — No easy answers were offered Friday when a group of concerned university retirees questioned Southern Illinois state legislators about the future of state pensions.

The meeting of the SIU chapter of the State Universities Annuitants Association also provided an opportunity for the members to rally against a proposed constitutional amendment they believe would negatively impact contractually negotiated retirement plans guaranteed by the state’s constitution.

Constitutional Amendment 49 would change language governing the state’s ability to change pension payouts, and that has some retirees ready to fight.

“It is beyond important that not only everyone in this room, but everyone in this community vote ‘no’ on it,” said Bruce Applebee, a member of the annuitants’ executive committee against the constitutional amendment.

State Sen. Dave Luechtefeld, R-Okawville, and state Rep. Mike Bost, R-Murphysboro, addressed the audience and fielded questions during a meeting that stretched more than an hour. State Rep. John Bradley, D-Marion, spoke at the meeting but had to leave before the question-and-answer session.

Luechtefeld has a retired teacher’s pension, but he has no plans to take legislator’s pension.

Luechtefeld said he doubted the amendment would have any impact on pensions if it passed in November.

“I don’t think it’s going to hurt or help your situation,” he said.

Although Bost, Bradley and Luechtefeld said they support retirees, they said state’s ever worsening economic condition will eventually force changes to be made.

“Unless something is done to pensions, you may not have a pension some day,” Luechtefeld said.

Bost cautioned, “All the systems will fail if we don’t do something.”

Bost compared the work that must be done to address more than $80 billion in unfunded pensions to being forced to grab a rough rope to avoid falling off a 5,000-foot cliff.

The rope would chafe, he said, but it beats the alternative, even if it takes a while for the worst to happen.

“We would be OK for 4,999 feet,” Bost said.

Luechtefeld said he doubted any pension reform would get done before the new General Assembly convenes in January, and he was not sure what kind of plan would be offered.

Although Luechtefeld would not promise to vote against any plan that cut pensions for current retirees because compromise among groups representing the state and pensioners may include a reduction, he said he has not yet seen a plan he would support.

Applebee said he was not satisfied with the answers on pensions, but it was not the fault of Bost and Luechtefeld. Applebee, a lifelong Democrat, said he appreciated the Republicans’ candor.

“I think that they gave some pretty good answers, and maybe they explained the fact that I tend to approach everything as if it’s black and white, and they made it clear that it’s not black and white, and that’s a good answer,” Applebee said.

The retirees’ compounded cost of living adjustment, or COLA, has been targeted in a bill backed by Illinois Senate President John Cullerton, D-Chicago.

Bost said he did not think the bill would affect the baseline COLA, but compounded additions were hurting the state’s financial position, especially when high-dollar pensions doubled after 21 years.

The issue of taxing retirement income also came up, and both men said they would listen to the arguments for it, but Bost said he doubted it would happen because every retiree would have to be taxed, meaning 93 percent of retirees would have to pay taxes because 7 percent were willing to sacrifice.

On Twitter: @DW_Norris_SI

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