District 54 candidates disagree on pension reform

Monday, September 27, 2010

When it comes to pension reform, debate between the candidates for the state's 54th District House seat boils down to radical overhaul vs. measured tweaks and adjustments.

Republican Tom Morrison, a small-business owner from Palatine, said legislation enacted this year didn't go nearly far enough to begin shrinking Illinois' $80 billion unfunded pension liability.

He proposes the state convert to a defined contribution system as found in the private sector - even for longtime employees. He believes the state should honor 100 percent of already accrued pension benefits upon retirement, but base future benefits for all employees on retirement accounts such as 401(k) plans.

He'd provide two or three years' notice before the switch is made in the event some want to search for different jobs.

"If only marginal changes are made ... there won't be money for anybody," Morrison said. "Most people employed in the private sector have virtually no safety net."

Whether eliminating pensions for current employees is constitutional is something he believes attorneys can make a case for since services have yet to be rendered.

Morrison also proposes eliminating pensions for elected officials, which he knows would make him unpopular among many of his peers.

"This (pension crisis) isn't the workers' fault. It's the General Assembly's fault. We need to be the first to cut back. They should lead by example," he said.

Morrison said he understands that politics is the art of what's possible, and that his immediate focus would be to go after more realistic measures that stop abuse, such as preventing employees from double- and triple-dipping and minimizing salary bumps at the end of a career to boost pension payouts.

Taking a more scaled-back approach is Flamm, who said the notion that public sector employees should lose their pension simply because most of the private sector did is a "race to the bottom."

"It's a way to make the country poorer and poorer," Flamm said.

Flamm believes a radical overhaul would create massive disruption and even greater instability than there is now. Legislation passed this year is a good start, he said, and further tweaks - such as lowering certain benefits and raising the retirement age - can be made.

He said he's spoken with several union leaders, who have relayed a willingness to negotiate and take part in a necessary "shared sacrifice" by everyone. The pension liability would be a fraction of what it is today, he added, had the state made its annual contribution in the past, proving it can have an actuarially sound defined benefit plan.

Flamm also believes the system's value will bounce back as the economy rebounds.

"It won't solve the problem, but let's not exaggerate the problem," Flamm said.