As the state’s pension debt grows, 22 Illinois state legislators have decided not to accept state-subsidized retirement benefits.
With $97 billion in unfunded liabilities — more than $20,000 for every household in the state — Illinois’ five pension funds serving teachers, state employees, university employees, judges, and legislators, are in desperate shape. Attributed to inadequate contributions by the government, the pension systems are only 39 percent funded, when 80 percent is considered healthy.
Having chronically underfunded the pension system and borrowing against it to fund other budgetary needs, legislators must now solve a dire pension crisis that they, or their predecessors, created.
“If we’re going to mess with anybody’s pension, then I believe we should start with the people who are supposed to be leaders of the state,” said State Rep. John Cabello (R-Machesney Park).
Freshman lawmaker Cabello, like most Illinois state legislators, has a job outside of his role as state representative. On a leave of absence from the Rockford Police Department he said, in addition to denying his state representative pension, he denied pensions and salary when he served on the Harlem Township and Winnebago County boards.
“Elected officials that are taking a pension are saying, ‘let me work eight years and then you can support me for the rest of my life,’ I just don’t think that’s right — it’s immorally wrong,” he said. “I wish we would do more ... I wish our legislation would feel the urgency of our debt and move much quicker.”
“Quinn should lock us in the chamber with no water, no bathroom breaks, no food and no pay until we get these problems solved.”
Among the highest-paid in the country, Illinois House and Senate members earn approximately $70,000 for the part-time job and $10,000 to $20,000 more for serving in a caucus leadership role or as a committee chairman. They also get housing and food stipends while in Springfield.
With an eight-year vesting period, state legislators can retire between the ages of 62 and 67 and collect up to 60 percent of their final salary. They don’t pay state income taxes on their retirement income, which increases each year by 3 percent, or half of the consumer price index, whichever is lower.
Of the General Assembly’s 177 lawmakers, 22 have chosen to forgo their state pensions, 14 of which are freshman.
In addition to Cabello, other state representatives who have denied state-subsidized pension benefits include State Reps. Kelly Burke (D-Oak Lawn), Katherine Cloonen (D-Kankakee), C.D. Davidsmeyer (R-Jacksonville), Scott Drury (D-Highwood), Brad Halbrook (R-Charleston), Josh Harms (R-Watseka), Jeanne Ives (R-Wheaton), Dwight Kay (R-Glen Carbon), Stephanie Kifowit (D-Aurora), David McSweeney (R-Barrington Hills), Thomas Morrison (R-Palatine), Martin Moylan (D-Des Plaines), Pam Roth (R-Morris), Ron Sandack (R-Downers Grove), Sue Scherer (D-Decatur) and Kathleen Willis (D-Addison). State Sens. Melinda Bush (D-Grayslake), Thomas Cullerton (D-Villa Park), David Luechtefeld (R-Okawville), Andy Manar (D-Bunker Hill ) and Julie Morrison (D-Deerfield ) have also opted out.
One researcher called the legislators' decision to opt out “purely symbolic.”
“The bottom line is the General Assembly retirement system is one of the smallest and least material of all fives pension funds,” said Ralph Martire, executive director for the Center for Tax and Budget Accountability, a bi-partisan research and advocacy think tank that promotes fair, efficient and progressive tax, spending and economic policies. “The problem in funding pension obligations involves the big three, the teachers’ retirement system, the state employees’ retirement system, and the state university system.”
“The fact that some elected officials, who have the opportunity to earn retirement income outside of their employment with the state, decide to give up a pension benefit that is not even material in scope of the pension liability, strikes me as purely political and completely ineffectual,” he said.
Of Illinois’ nearly $100 billion in unfunded pension liability, the lawmakers' pension fund makes up approximately $250 million.
One pension reform plan, proposed by Senate President John Cullerton (D-Chicago), would increase employee contributions by 2 percent. The proposal, SB 1, calls for a reduction in cost of living adjustments and requires workers to opt for either bigger contributions or guaranteed health benefits upon retirement. The plan is unpopular with labor unions and their advocates.
Not wanting to comment on legislators’ personal decision to accept or deny a state pension, Justin Nigro, a spokesman for the We Are One coalition, said that pensions represent employees’ life savings and “that is something that should be protected.”
“Both employees and retirees are very anxious, they don’t’ know what’s going to happen to their pensions,” he said. We Are One is a labor coalition representing more than one million statewide union members to advocate for public employee pensions.
“So far many of the proposals are seeking to balance the pension debt on the backs of workers and retirees who for years made their contributions, even though the state did not, so there’s some sense of injustice.”