People at the bottom line of pension reform

Thursday, September 16, 2010

Brookfield, IL —When Gov. Pat Quinn signed the public pension reform bill in April, it was touted as a way to save more than $200 billion tax dollars in 35 years and protect retirement for pensioned workers.

Pensionable salaries are capped at $106,800, and workers will have to be 67 years old to retire, as long as they have 10 years of service.

However, many believe Quinn and the Illinois Legislature didn’t go far enough, and have accused Springfield of doing too little too late. The state is broke, and there’s no relief in sight for an expected $76 billion shortfall in what the state kicks in to its pension funds.

Meanwhile, many pensioned workers are left with uncertainty — perhaps the job they started years ago with good benefits may not be the same job with good benefits when it comes time to retire.

Brookfield village trustees passed a resolution to put a referendum on the November ballot about pension reform, and village officials are hoping if enough municipalities pass the referendum, Springfield will take notice.

Doug Cooper, the village finance director, said the advisory referendum was non-binding but important. It was passed at an August board meeting.

“The referendum discusses if public safety pensions in the state of Illinois should be reformed,” Cooper said. “I think they need to be reformed, but it depends on how you want to reform it — maybe benefit levels are too high. Fire and police do not get Social Security because they have the pension — they only pay into their downstate pension funds.”
Cooper said pension costs are definitely affecting Brookfield’s bottom line.

“We had to increase our pension contribution this year by $400,000,” Cooper said. “That money could have been used for capital projects. More of our tax levy dollars are going toward funding of our pension contributions than general corporate purposes.”

Local policemen and firefighters are also concerned about the pension issue.

Lt. James Episcopo, who has been with the Brookfield Police Department for 23 years, said that while he wasn’t concerned about losing his pension, he was concerned about the guidelines the state was going to create.

“I don’t think anybody is panicking right now,” Episcopo said. “We’re concerned about what the guidelines are going to be — when we can get our maximum benefits, and what changes are going to occur. It remains to be seen what will happen.”

Lt. Mark Duffek, also of the Brookfield Fire Department, said that the pension problems were created by the state. Duffek is the president of the department’s pension board.

“It is a state issue, created by state politicians,” Duffek said. “They changed how police and fire pensions were funded in 1993 because they wanted more money for street repairs and technology projects. They were warned that it would haunt them, and now the time has come. Nobody knew the economy was going to go in the tank, and now they’re trying to blame police and fire.”

Duffek, who has been a firefighter for 24 years — almost all of them in Brookfield except for an eight-month stint at the Pleasantview Fire Protection District — said that there were strong differences between police and fire and the way IMRF jobs, like the village manager position, were funded for pensions.

“IMRF is 100 percent funded,” Duffek said. “If a municipality does not pay their fair share, they can still get their money by state statute, through taxes. They won’t do that for police and fire. I don’t get Social Security. I used to work part time as a pharmacy technician, and I paid into Social Security, but won’t collect on it.”

Duffek said he thought the village might change things with the referendum.

“The Illinois Municipal League wants it to give them muscle to go down to Springfield,” Duffek said. “They want to say, out of 40 municipalities, 39 want this reformed.”

David Bonnette, the interim superintendent of Riverside Brookfield High School, said reform was necessary due to the funding problems.

“The general assembly tried to tweak and improve the pension process, but they failed to live up to their obligation of funding it,” Bonnette said.

Robert Sherman teaches science at Lyons Township High School and serves as president of the faculty association. He also believes taxpayers need to understand that teachers do not collect Social Security when they retire.

“The state Legislature’s lack of fulfilling their promises for years is the real problem,” Sherman said. “I believe that the amount that the state has not paid to the (Teacher Retirement System), as promised, is greater than the principal balance in the (Teacher Retirement System). The teachers have always contributed what has been asked, the state has not.”

Sherman said he was confident his future pension payments were secured. He is, however, concerned about the longevity of the retirement system and the benefits that may or may not be promised to new teachers. Under Quinn’s reform, a two-tiered system has been proposed that would separate and protect pensions that are already established, but would change the matrix for future pensioners.

“Illinois will loose new teachers to other neighboring states if the proposed changes to TRS go through,” he said.

As for pension critics, Sherman said he cannot understand how teachers can be included as part of the problem.
“Both teachers and school districts have continued to make their contributions to TRS,” he said.

“The problem is the billions of dollars that the state Legislature has not contributed as promised over the last few decades. This unfunded liability is the real problem. Had the state followed through on its promises, TRS would be in greater financial standing. Returns on investments made by TRS on those missing state contributions would have enabled the system more easily content to provide benefits to retired teachers.”

Assistant Village Manager Keith Sbiral said that the pension reform was a state issue, but that local municipalities were taking a stand on it.

“If it passes in huge numbers, then the village thinks it would show Springfield that they should do something,” Sbiral said. “It will show the Legislature that the public wants public safety reform, and might push the cause a little bit.”