Mussman, Higgins weigh in on pensions

Friday, October 29, 2010

The 56th state House seat currently held by Paul Froehlich is in play Nov. 2 because he is not seeking re-election. Schaumburg residents, Michelle Mussman, a Democrat, and Ryan Higgins, a Republican, are running for the seat. Here are excerpts from their responses to the Daily Herald questionnaire.

Q. What is your view on the pension legislation passed last year? Do you support or oppose lower benefits and higher employee contributions for current state workers? How should state officials resolve underfunding problems?

Mussman. The General Assembly took the first step toward pension reform by creating a two-tiered pension system, and I applaud their efforts, but we can do more. First, we must ban all retirees from double-dipping.

A government employee collecting a pension from one government agency while receiving a taxpayer-funded paycheck from another government agency should either voluntarily forfeit collecting a pension while employed or the government agency should reduce the employee's taxpayer-funded salary.

Second, the General Assembly must stick to a payment plan and pay its bills on time. We have a 50-year funding plan for our pension systems on the books, but the General Assembly has consistently ignored or refused to follow it. If we are ever going to get out of this mess, the General Assembly must establish and stick with a real schedule for payments.

Third, we must eliminate pensions for public officials and employees who abuse the public trust. Those who abuse taxpayer dollars and harm the public confidence in government should not reap the benefits of a pension.

As for altering current state worker pension benefits, the vast majority of legal experts commenting on this issue have said that it is unconstitutional to reduce current employees' pension benefits. It is my understanding that of all the lawyers who have commented on this issue, only one firm disagrees with this conclusion.

The General Assembly must face the pension crisis head on. Elected officials have mismanaged and abused the pension systems for decades, and now we, the taxpayers, are on the hook for billions of dollars.

The problem was exacerbated by giving public workers sweetheart pension deals, all the while knowing that the state did not have the money to pay for increased benefits.

Many families have lost retirement savings in this economy; and those families are forced to subsidize generous government employee pensions. Instead of using our hard-earned tax dollars to improve education or assist the most vulnerable in our community, a majority of our tax dollars must now go to fund government employee pensions.

This crisis isn't going to resolve itself and legislative leaders cannot attempt to put together a backroom deal. If we are going to solve this crisis we need everyone to be at the table and everything must be on the table.

Higgins: Illinois' pension system has unfunded obligations of over $80 billion -- or over $6,200 per every man, woman, and child in the state. Retirees and public employees have the right to every dollar of pension benefits they have earned to date, but taxpayers simply cannot afford to continue paying excessive benefits to public employees forever. We should adjust public employee benefits accruing from today forward to be in line with what private sector employees receive.

I support the legislation that passed last year that adjusts pension benefits for future state workers, hired on or after January 1, 2011. This legislation: (1) raises the retirement age for full pension benefits to 67 with 10 years of service and raises the early retirement age to 62 with 10 years of service; (2) limits the maximum pensionable salary to $106,800; (3) calculates final average salary using the highest eight (instead of four) consecutive salary years out of the previous 10 years; (4) calculates cost of living adjustments (COLA) using simple interest instead of compound interest, caps COLA adjustments at the lesser of 3 percent or 1/2 of the inflation rate, and applies COLA adjustments only after age 67; (5) caps General Assembly and judges' pensions at 60 percent of the calculated final average salary (instead of 85 percent); and (6) suspends the pension of any retiree who goes to work for a unit of government that participates in another pension system (i.e., prevents the practice known as "double-dipping").

This legislation, however, did not go far enough. The reforms apply only to future public employees hired on or after January 1, 2011.

We need also to reform pension benefits for the future accrued time of current state employees. Any credible plan to balance the state budget without a tax increase must include reforming pension benefits for the future accrued time of current state employees.