Editorial: Illinois' new pension measure tiptoes around shortfall problem

Saturday, May 29, 2010

A union representing state employees warned that legislation passed last week to trim pension benefits for newly hired state workers is "opening the door to slashing pensions for existing workers."
If only we could believe it. We see the measure as Illinois House Speaker Michael Madigan's attempt to look like he's doing something about the pension crisis without inflicting any real pain on state employees, who tend to vote in large numbers.
The legislation Mr. Madigan sprung last week without so much as a heads-up is a half-measure that would only prevent future state workers from piling up pension benefits at the unaffordable pace current employees are accruing them. That's important, but it won't shave a dime off the state's $80 billion in unfunded pension liabilities.
Taking benefits away from workers who don't exist yet is politically easy. Cutting the benefits of existing workers who feel entitled to them is politically hard. Unless Mr. Madigan, state Senate President John Cullerton and Gov. Pat Quinn are willing to face that political risk, pension expenses will bury the state. They can start by requiring current state workers to accept the same terms last week's legislation imposes on new employees, such as:
Raise the age for retirement with full pension benefits
Reduce cost-of-living increases for pensioners
Base pension payments on an employee's average salary for eight of the last 10 years of employment rather than four
They should go a step further by adopting a measure Mr. Quinn once backed that would raise the amount state workers contribute to their pension plans.
Those moves would reduce the current pension shortfall immediately. Unions would howl, but that's what unions do whenever the tiniest reduction in benefits is proposed.
We believe state workers realize the state's fiscal mess threatens both their jobs and pensions. Even with the changes, they'd still have a better pension deal than most private-sector workers get. And the changes would increase the odds that the state will have the money to pay those benefits.