By Jamey Dunn
Union leaders today publicly rejected a public pension reform outline that a special legislative committee is considering.
On Friday, the Capitol Fax blog and the Associated Press released details of a framework the bipartisan conference committee has been working on. The plan would toss out the 3 percent annual compounded cost-of-living adjustment retirees currently receive. Instead, cost-of-living adjustments would be half the rate of inflation. The rates would have a base level and cap set, but the outline obtained by the two outlets did not include those limits. The change would likely result in smaller COLAs for retirees.
Proposals in the past have called for retirees to contribute a larger portion of their paychecks to their retirement, but this concept would reduce the amount employees chip in by 1 percentage point. The retirement age would not change under the framework, but the way that retirement benefits are calculated might be changed to consider pay over several years of employment instead of the final typically higher-paid years. The changes in the outline are estimated to reduce the almost $100 billion unfunded pension liability by $18.1 billion and save the state $145 billion over 30 years.
The decreased contribution from employees would likely be used as consideration for reductions in benefits elsewhere. Several lawmakers believe that the state Constitution requires any cut in retiree benefits to come as part of a trade for something of value. However, there has been broad disagreement in the past on how consideration would be achieved and whether it is even necessary to cut future benefits that employees have not yet earned.
Union officials do not believe that the new plan would meet constitutional requirements. “Published reports suggest the legislative conference committee on pension reform is ready to rehash the same unfair, unconstitutional attacks on retirement security,” said a statement from the We Are Once Coalition. “Teachers, police, nurses, caregivers and hundreds of thousands more working and retired public servants earned their pension, never missed a payment, and in most cases aren’t eligible for Social Security. They deserve better from the conferees. So does the Illinois Constitution, which lawmakers are sworn to uphold and which provisions of the committee’s outline would directly violate.” The statement calls for lawmakers to reconsider the union-backed Senate Bill 2404. Senate President John Cullerton sponsored that bill, which was approved in by the Senate. But House Speaker Michael Madigan refused to call the bill for a vote because he said it did not save enough money. Supporters of SB 2404 said it could have easily passed in the House if called for a vote. The union support of the bill definitely helped to bolster its popularity among lawmakers.
Committee members have been saying for weeks that they are making progress toward a proposal for changes to the public employees' pension systems. However, they say the outline obtained by members of the press is not necessarily their final proposal. “The committee has not come to a consensus,” Committee chair Sen. Kwame Raoul, a Chicago Democrat, told the AP. “Our work is not done.”
Showing posts with label conference committee. Show all posts
Showing posts with label conference committee. Show all posts
Monday, August 26, 2013
Thursday, June 20, 2013
Committee likely to mine old ground for pension compromise
By Jamey Dunn
On Wednesday, the Illinois Senate and House voted to hand over pension reform to a group of 10 legislators who will try to produce a compromise that can pass in both chambers. Several pension ideas have been floated in recent years, and components of those proposals will likely make their way into the committee’s recommendations.
“I think the healthy way to do this is to walk into the room and say, ‘We’ve got a lot of different things that have been Frankensteined together, and let us now examine all of them and see what we can assemble that can get 30 votes in the Senate, 60 votes in the House and achieve adequate savings to put the state on a manageable fiscal course,’” said Sen. Daniel Biss, an Evanston Democrat. Biss was chosen by Senate President John Cullerton to serve on the conference committee. He has been a key player in the efforts to pass changes to the state’s pension systems. However, Biss has been in favor of Senate Bill 1, a measure opposed by Cullerton but backed by House Speaker Michael Madigan. Supporters of SB 1 say that it creates enough savings, by reducing employee benefits, to ensure that the public employee pension systems would be stabilized for the foreseeable future. They argue that the state’s shaky fiscal situation and the nearly $100 billion unfunded liability would justify the Illinois Supreme Court granting lawmakers special powers to fix the problem, despite a constitutional protection for pension benefits.
SB 1 would:
SB1 passed the House in early May with 62 “yes” votes, but it fell short of the 30 votes needed in the Senate. Only 16 senators voted in favor of the bill when it was called for a vote on the floor on May 30. Senate President Cullerton believes that SB 1 is unconstitutional because it does not offer employees anything in return for cutting their benefits. He worked out a compromise with the unions that would offer employees a variety of choices.
Under Cullerton's preferred bill, SB 2404:
But Cullerton’s plan apparently would save far less than SB1. There is also a level of uncertainty because they savings would hinge on which choices employees made. Madigan refused to call Cullerton’s plan for a floor vote in the House despite Cullerton’s insistence that the bill had the support needed to pass in that chamber. Cullerton argues that Madigan's SB1 will save nothing if it is tossed out by the Illinois Supreme Court.
“There needs to be some consensus around what makes it constitutional and a consensus around an adequate level of savings,” says Northbrook Democratic Rep. Elaine Nekritz, who is one of the members Madigan chose to serve on the conference committee. Like Biss, Nekritz has been a point person on the issue for some time and a strong supporter of SB 1. Nekritz said the House will likely never vote on Cullerton’s proposal, but she said, “That doesn’t change the fact that we all recognize that ‘just say no’ is not going to be an active response right now.” So the key for the committee will be finding something that satisfies Cullerton’s demand that employees be offered some kind of consideration for cuts to benefits, while still saving enough money to gain the backing of those who supported SB 1 — most important of all, Madigan.
The presumption is that to reach this compromise, the committee will pull largely from legislation and concepts that have already been debated. “You can cook the soup a number of different ways, but the ingredients are pretty limited at this point,” said Kent Redfield, an emeritus professor of political science at the University of Illinois Springfield.
Biss said he knows that the final product will likely not save the $187 billion that SB 1 is expected to cut. “My view is that there’s room to give on both sides. I think that we’ll need to land in the triple digits. I think if we land in the $125[billion] to $150 billion range, that’s likely to provide the level of fiscal relief that the state needs.” Cullerton this week indicated that he might be open to a model of consideration that does not involve a choice.
A proposal from the Institute of Government and Public Affairs at the University of Illinois would swap the current 3 percent compounded annual COLA, which is the largest cost driver in the pension systems, for a COLA that is tied to inflation. Under SB 2591, which a Senate committee took testimony on this week, the COLA would be one-half of the adjusted Consumer Price Index from the previous year. That means that in times such as recent years, when inflation has been low, retirees would receive small COLAs or sometimes no COLA at all. But in years when inflation is high, retirees would get larger COLAs.
The framers of this proposal say that other factors would help to negate the cost for COLAs in high-inflation years. “Linking COLA to inflation will also reduce the cost of providing the increases during periods of low inflation. Costs would increase when inflation is high; but the impact of this higher cost is mitigated by the fact that the state’s tax base, and thus the state’s tax revenue, rises more quickly when inflation is high,” said a report on the plan from the IGPA. The authors of the report say that this change to COLAs would constitute consideration and would make their plan constitutional. “The truth is that the current COLA provision offers no protection against high inflation — which is an essential feature of any good pension system. It is for this reason that we believe that annuity increases should be linked to some measure correlated with inflation,” the report says. “In our view, it would be constitutionally permissible to reduce the expected average future increase in exchange for the valuable insurance protection that individuals would receive during periods of high inflation.”
Cullerton did not indicate he was in favor of the idea this week, but did say that the plan is something to be considered. The proposal would also require employees to contribute an additional 2 percent of their pay toward retirement benefits. The legislation has the support of the public university presidents and is intended to be coupled with a bill that would gradually shift the future costs of employee retirement benefits to the universities. SB 2591 would apply only to the State University Retirement System, but concepts from the plan could be applied to the other systems for state workers, teachers and lawmakers. Cullerton also said this week that it is possible that different changes would be made to the different systems.
Other pieces may end up in a final plan, such as a funding guarantee that would allow the systems to sue if the state does not make its required annual contribution. Both SB 1 and SB 2404 had some version of a guarantee. Some who back SB 1 have even floated the idea of the guarantee being the thing that is given as consideration in exchange for benefit reductions. However, Cullerton has not warmed to this idea in the past. Recent proposals have also called for money that is currently being used to pay off borrowing that was made to make past pension payments to be redirected to pay down the unfunded liability once the bonds are retired. That could mean an additional $1 billion annually for pensions costs.
Redfield said that even though pension changes are now in the hands of the committee, in the end it will be legislative leaders who are still calling the shots. “Certainly, in terms of the Democrats, I don’t think Cullerton and Madigan have delegated their power to negotiate to those people. They can’t cut a deal independently of their leader. I don’t think that’s going to happen,” he said. “It still comes down to the leaders, and to a certain extent it comes down to one of the [Democratic] leaders backing down from where they were a week ago.”
On Wednesday, the Illinois Senate and House voted to hand over pension reform to a group of 10 legislators who will try to produce a compromise that can pass in both chambers. Several pension ideas have been floated in recent years, and components of those proposals will likely make their way into the committee’s recommendations.
“I think the healthy way to do this is to walk into the room and say, ‘We’ve got a lot of different things that have been Frankensteined together, and let us now examine all of them and see what we can assemble that can get 30 votes in the Senate, 60 votes in the House and achieve adequate savings to put the state on a manageable fiscal course,’” said Sen. Daniel Biss, an Evanston Democrat. Biss was chosen by Senate President John Cullerton to serve on the conference committee. He has been a key player in the efforts to pass changes to the state’s pension systems. However, Biss has been in favor of Senate Bill 1, a measure opposed by Cullerton but backed by House Speaker Michael Madigan. Supporters of SB 1 say that it creates enough savings, by reducing employee benefits, to ensure that the public employee pension systems would be stabilized for the foreseeable future. They argue that the state’s shaky fiscal situation and the nearly $100 billion unfunded liability would justify the Illinois Supreme Court granting lawmakers special powers to fix the problem, despite a constitutional protection for pension benefits.
SB 1 would:
- Increase the retirement age for employees younger than 46. Employees from 40 to 45 would see a one-year increase, employees 35 to 39 would see a three-year increase and employees 34 and younger would see a five-year increase.
- Require employees to contribute 2 percent more of their salaries. The increased contribution would be phased in over two years.
- Cap pensionable salary at $109,000, the limit that is currently used for Tier Two employees. The cap would increase at the rate of one half of the Consumer Price Index that is set for urban consumers. Base the amount of pension benefits that would be eligible for cost-of-living adjustments (COLAs) on the amount of time employees worked. For each year of employment, $1,000 (or $800 for employees who receive Social Security benefits) of pension income would be eligible for a cost-of-living adjustment. For example, if an employee worked for 30 years, then $30,000 of his or her retirement benefit would see an annual COLA. Before employees reached their cap, they would receive a compounding COLA. After they reached the cap, they would get a flat annual increase.
SB1 passed the House in early May with 62 “yes” votes, but it fell short of the 30 votes needed in the Senate. Only 16 senators voted in favor of the bill when it was called for a vote on the floor on May 30. Senate President Cullerton believes that SB 1 is unconstitutional because it does not offer employees anything in return for cutting their benefits. He worked out a compromise with the unions that would offer employees a variety of choices.
Under Cullerton's preferred bill, SB 2404:
- Option 1 Employees would give up their current 3 percent compounded cost of living adjustment for a flat 3 percent COLA that would be delayed for three years after retirement. In exchange, the employees would receive access to retiree health care plans, and future raises would count toward their pensions. They would also have the option of enrolling in a 401(k)-like plan to supplement their pensions.
- Option 2 Under this option, employees would keep their compounded COLAs but would lose access to retiree health care, which is currently subsidized by the state. Their future raises would not count toward pension benefits
- Option 3 Employees would keep their COLAs and access to retiree health care, but they would pay 2 percent more of their salaries to their retirement benefits. Their COLAs would be delayed for three years after retirement.
- Option 1 Workers would keep the 3 percent compounded COLA but give up access to retiree health care.
- Option 2 They could still have access to retiree health care and a 3 percent compounded COLA, but the COLA would be frozen for two years.
But Cullerton’s plan apparently would save far less than SB1. There is also a level of uncertainty because they savings would hinge on which choices employees made. Madigan refused to call Cullerton’s plan for a floor vote in the House despite Cullerton’s insistence that the bill had the support needed to pass in that chamber. Cullerton argues that Madigan's SB1 will save nothing if it is tossed out by the Illinois Supreme Court.
“There needs to be some consensus around what makes it constitutional and a consensus around an adequate level of savings,” says Northbrook Democratic Rep. Elaine Nekritz, who is one of the members Madigan chose to serve on the conference committee. Like Biss, Nekritz has been a point person on the issue for some time and a strong supporter of SB 1. Nekritz said the House will likely never vote on Cullerton’s proposal, but she said, “That doesn’t change the fact that we all recognize that ‘just say no’ is not going to be an active response right now.” So the key for the committee will be finding something that satisfies Cullerton’s demand that employees be offered some kind of consideration for cuts to benefits, while still saving enough money to gain the backing of those who supported SB 1 — most important of all, Madigan.
The presumption is that to reach this compromise, the committee will pull largely from legislation and concepts that have already been debated. “You can cook the soup a number of different ways, but the ingredients are pretty limited at this point,” said Kent Redfield, an emeritus professor of political science at the University of Illinois Springfield.
Biss said he knows that the final product will likely not save the $187 billion that SB 1 is expected to cut. “My view is that there’s room to give on both sides. I think that we’ll need to land in the triple digits. I think if we land in the $125[billion] to $150 billion range, that’s likely to provide the level of fiscal relief that the state needs.” Cullerton this week indicated that he might be open to a model of consideration that does not involve a choice.
A proposal from the Institute of Government and Public Affairs at the University of Illinois would swap the current 3 percent compounded annual COLA, which is the largest cost driver in the pension systems, for a COLA that is tied to inflation. Under SB 2591, which a Senate committee took testimony on this week, the COLA would be one-half of the adjusted Consumer Price Index from the previous year. That means that in times such as recent years, when inflation has been low, retirees would receive small COLAs or sometimes no COLA at all. But in years when inflation is high, retirees would get larger COLAs.
The framers of this proposal say that other factors would help to negate the cost for COLAs in high-inflation years. “Linking COLA to inflation will also reduce the cost of providing the increases during periods of low inflation. Costs would increase when inflation is high; but the impact of this higher cost is mitigated by the fact that the state’s tax base, and thus the state’s tax revenue, rises more quickly when inflation is high,” said a report on the plan from the IGPA. The authors of the report say that this change to COLAs would constitute consideration and would make their plan constitutional. “The truth is that the current COLA provision offers no protection against high inflation — which is an essential feature of any good pension system. It is for this reason that we believe that annuity increases should be linked to some measure correlated with inflation,” the report says. “In our view, it would be constitutionally permissible to reduce the expected average future increase in exchange for the valuable insurance protection that individuals would receive during periods of high inflation.”
Cullerton did not indicate he was in favor of the idea this week, but did say that the plan is something to be considered. The proposal would also require employees to contribute an additional 2 percent of their pay toward retirement benefits. The legislation has the support of the public university presidents and is intended to be coupled with a bill that would gradually shift the future costs of employee retirement benefits to the universities. SB 2591 would apply only to the State University Retirement System, but concepts from the plan could be applied to the other systems for state workers, teachers and lawmakers. Cullerton also said this week that it is possible that different changes would be made to the different systems.
Other pieces may end up in a final plan, such as a funding guarantee that would allow the systems to sue if the state does not make its required annual contribution. Both SB 1 and SB 2404 had some version of a guarantee. Some who back SB 1 have even floated the idea of the guarantee being the thing that is given as consideration in exchange for benefit reductions. However, Cullerton has not warmed to this idea in the past. Recent proposals have also called for money that is currently being used to pay off borrowing that was made to make past pension payments to be redirected to pay down the unfunded liability once the bonds are retired. That could mean an additional $1 billion annually for pensions costs.
Redfield said that even though pension changes are now in the hands of the committee, in the end it will be legislative leaders who are still calling the shots. “Certainly, in terms of the Democrats, I don’t think Cullerton and Madigan have delegated their power to negotiate to those people. They can’t cut a deal independently of their leader. I don’t think that’s going to happen,” he said. “It still comes down to the leaders, and to a certain extent it comes down to one of the [Democratic] leaders backing down from where they were a week ago.”
Tuesday, June 18, 2013
Madigan: Conference committee marks a 'new start' on pension talks
By Jamey Dunn with Meredith Colias contributing
After weeks of gridlock, Illinois legislative leaders plan to appoint a special committee to craft pension changes. The plans that they propose could vary across the state’s five public employee pension systems.
Gov. Pat Quinn and legislative leaders have agreed to take pension reform to a conference committee, a process used when both chambers cannot agree on a piece of legislation. Leaders in each chamber will select five members to serve on the committee. Four of the committee members will be Republicans, and six will be Democrats.
The group will then be left to hash out a proposal. If the majority of committee members agree, the plan will then go on to the full legislature for a vote. If they cannot agree, a new committee would be chosen. Conference committees are used to reconcile the differences between bills passed in both chambers. However, Senate President John Cullerton and House Speaker Michael Madigan say everything is on the table for this committee. The members could pull from previous pension reform proposals and come up with new ideas. After hearing testimony from several public university presidents on a proposal that would only apply to university employees, Cullerton said he was open to changes that would be tailored to each system. “You could even have different solutions for different systems,” he said.
The university proposal, which was created by the University of Illinois' Institute of Government and Public Affairs, would require a larger contribution from employees and would tie cost-of-living increases to one-half the rate of inflation. But Cullerton said Senate Bill 2591 is not necessarily a clear model for the final product the committee would put forth. “It’s one of the things that the conference committee would look at.” A Senate committee took testimony today on the proposal, as well as a bill that would shift future pension costs to universities and community colleges. “We’re here on pensions, so we figured we’d hear what they had to say,” Cullerton said. The Senate voted down the cost shift, which university and college officials agreed to, on the last day of regular session.
Lawmakers are back in Springfield this week after Quinn called a special session on pensions for Wednesday. Tomorrow, they are expected to take the votes needed to set the conference committee process into action.
Cullerton and Madigan reached a stalemate on pension reform at the end of the regular session. Cullerton said Madigan’s plan was unconstitutional, and Madigan said Cullerton’s proposal would not save enough money. Madigan’s measure, SB 1, failed to gain the support needed to pass in the Senate. Madigan refused to call Cullerton’s legislation, SB 2404, for a vote in the House. Last week, Quinn floated the idea of using a conference committee to break the gridlock, and Madigan and Cullerton said today that they are agreeing to the governor’s request.
Brooke Anderson, a spokeswoman for Quinn, said in an email that the committee is the first time the two leaders agreed to “a means to an end” on pension changes. “As Gov. Quinn has made clear for almost two years now, he will not approve any plan that is not comprehensive and that does not erase the unfunded liability over the next 30 years,” she said.
But neither legislative leader today was able to give a concrete reason why the committee could succeed where years of other legislative process and multiple pension working groups have failed. While it has been many years since a conference committee was held, it is certainly not unheard of in recent history.
“I was in many conference committees,” Cullerton said today. “It’s another way. There’s nothing wrong with it.”
“Obviously there’s a need for some compromise,” Madigan said.
Tension seemed to grow between Cullerton and Madigan when it became clear in the last days of session that pension reform was not going to pass both chambers. Madigan attributed the failure to a “lack of leadership” in the Senate. But today he said that reports of that statement had misrepresented his intent. “I meant that I was very disappointed and that this was a major issue that should have been addressed in a better fashion by everybody in the legislature, which is why we’re here today talking about it.” He called the conference committee “a new start.”
He added: “Let’s get good appointments to the conference committee. Let’s expect that they’ll do good work, and they’ll go in good faith and they’ll give us a good compromise.”
But Cullerton and Madigan are still not backing down from some key ideas included in both of their plans. Cullerton said today that he still believes that employees must be offered something in return for a reduction in their retirement benefits. His proposal, which has union backing, would have given them the choice between keeping cost of living adjustments with compounded interest or access to state-subsidized health care. Madigan said again today that the compounded COLAs have to go. “It’s the compounding [COLA] that’s caused the financial problems for all of these systems.”
Northbrook Rep. Elaine Nekritz, who has taken the lead for Democrats on pension legislation in the House, said, “We all know we have a clash on what constitutes constitutionality and what constitutes adequate savings, and we have to continue to try to find a way through those differences.”
Naperville Rep. Darlene Senger, who has been the key player on the issue for House Republicans and worked closely with Nekrtiz, said a conference committee could produce a solution. But she said there is a lot up in the air at this point, and she does have concerns. “How [is] this conference controlled? Who gets appointed to the committees? How long do the committees last? Where is the final say on everything? What regulations do you put in it?” she said. “None of that’s determined yet, so who knows?” Senger said she would like to serve on the committee. Both she and Nekritz are likely candidates. Anderson said that Quinn plans to call the legislature back in “early July to act upon a comprehensive pension reform plan.” Both Cullerton and Madigan indicated that the committee might not be done with its work by then.
Cullerton said the committee should not be rushed because members would need to get actuarial analysis of all the things they are considering and compare cost savings across different proposals. “That just isn’t something that you can do overnight. It usually takes weeks, so that’s going to be a little bit of a limitation.” He noted that anything the committee produces probably would not go into effect until next summer. For a proposal to take immediate effect, it would need the support of three-fifths of the members in each chamber — something that is very unlikely. “As much as we would like to do this as soon as possible, the actual effective date of the bill would be delayed,” Cullerton said.
After weeks of gridlock, Illinois legislative leaders plan to appoint a special committee to craft pension changes. The plans that they propose could vary across the state’s five public employee pension systems.
Gov. Pat Quinn and legislative leaders have agreed to take pension reform to a conference committee, a process used when both chambers cannot agree on a piece of legislation. Leaders in each chamber will select five members to serve on the committee. Four of the committee members will be Republicans, and six will be Democrats.
The group will then be left to hash out a proposal. If the majority of committee members agree, the plan will then go on to the full legislature for a vote. If they cannot agree, a new committee would be chosen. Conference committees are used to reconcile the differences between bills passed in both chambers. However, Senate President John Cullerton and House Speaker Michael Madigan say everything is on the table for this committee. The members could pull from previous pension reform proposals and come up with new ideas. After hearing testimony from several public university presidents on a proposal that would only apply to university employees, Cullerton said he was open to changes that would be tailored to each system. “You could even have different solutions for different systems,” he said.
The university proposal, which was created by the University of Illinois' Institute of Government and Public Affairs, would require a larger contribution from employees and would tie cost-of-living increases to one-half the rate of inflation. But Cullerton said Senate Bill 2591 is not necessarily a clear model for the final product the committee would put forth. “It’s one of the things that the conference committee would look at.” A Senate committee took testimony today on the proposal, as well as a bill that would shift future pension costs to universities and community colleges. “We’re here on pensions, so we figured we’d hear what they had to say,” Cullerton said. The Senate voted down the cost shift, which university and college officials agreed to, on the last day of regular session.
Lawmakers are back in Springfield this week after Quinn called a special session on pensions for Wednesday. Tomorrow, they are expected to take the votes needed to set the conference committee process into action.
Cullerton and Madigan reached a stalemate on pension reform at the end of the regular session. Cullerton said Madigan’s plan was unconstitutional, and Madigan said Cullerton’s proposal would not save enough money. Madigan’s measure, SB 1, failed to gain the support needed to pass in the Senate. Madigan refused to call Cullerton’s legislation, SB 2404, for a vote in the House. Last week, Quinn floated the idea of using a conference committee to break the gridlock, and Madigan and Cullerton said today that they are agreeing to the governor’s request.
Brooke Anderson, a spokeswoman for Quinn, said in an email that the committee is the first time the two leaders agreed to “a means to an end” on pension changes. “As Gov. Quinn has made clear for almost two years now, he will not approve any plan that is not comprehensive and that does not erase the unfunded liability over the next 30 years,” she said.
But neither legislative leader today was able to give a concrete reason why the committee could succeed where years of other legislative process and multiple pension working groups have failed. While it has been many years since a conference committee was held, it is certainly not unheard of in recent history.
“I was in many conference committees,” Cullerton said today. “It’s another way. There’s nothing wrong with it.”
“Obviously there’s a need for some compromise,” Madigan said.
Tension seemed to grow between Cullerton and Madigan when it became clear in the last days of session that pension reform was not going to pass both chambers. Madigan attributed the failure to a “lack of leadership” in the Senate. But today he said that reports of that statement had misrepresented his intent. “I meant that I was very disappointed and that this was a major issue that should have been addressed in a better fashion by everybody in the legislature, which is why we’re here today talking about it.” He called the conference committee “a new start.”
He added: “Let’s get good appointments to the conference committee. Let’s expect that they’ll do good work, and they’ll go in good faith and they’ll give us a good compromise.”
But Cullerton and Madigan are still not backing down from some key ideas included in both of their plans. Cullerton said today that he still believes that employees must be offered something in return for a reduction in their retirement benefits. His proposal, which has union backing, would have given them the choice between keeping cost of living adjustments with compounded interest or access to state-subsidized health care. Madigan said again today that the compounded COLAs have to go. “It’s the compounding [COLA] that’s caused the financial problems for all of these systems.”
Northbrook Rep. Elaine Nekritz, who has taken the lead for Democrats on pension legislation in the House, said, “We all know we have a clash on what constitutes constitutionality and what constitutes adequate savings, and we have to continue to try to find a way through those differences.”
Naperville Rep. Darlene Senger, who has been the key player on the issue for House Republicans and worked closely with Nekrtiz, said a conference committee could produce a solution. But she said there is a lot up in the air at this point, and she does have concerns. “How [is] this conference controlled? Who gets appointed to the committees? How long do the committees last? Where is the final say on everything? What regulations do you put in it?” she said. “None of that’s determined yet, so who knows?” Senger said she would like to serve on the committee. Both she and Nekritz are likely candidates. Anderson said that Quinn plans to call the legislature back in “early July to act upon a comprehensive pension reform plan.” Both Cullerton and Madigan indicated that the committee might not be done with its work by then.
Cullerton said the committee should not be rushed because members would need to get actuarial analysis of all the things they are considering and compare cost savings across different proposals. “That just isn’t something that you can do overnight. It usually takes weeks, so that’s going to be a little bit of a limitation.” He noted that anything the committee produces probably would not go into effect until next summer. For a proposal to take immediate effect, it would need the support of three-fifths of the members in each chamber — something that is very unlikely. “As much as we would like to do this as soon as possible, the actual effective date of the bill would be delayed,” Cullerton said.
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