SPRINGFIELD – An Illinois agency manager might have to delay retirement. A former university secretary wonders whether she’ll have to cancel vacations. A state office assistant fears he won’t be able to afford the medical care his wife needs.
Anxiety and anger are growing among state employees and retirees who wonder what will happen to their pocketbooks if lawmakers make expected changes to the state’s pension systems that could require workers to pay even more toward retirement, increase the retirement age and cut annual increases in benefits.
Workers spent their careers paying into their pension funds what the law told them to pay while, for decades, Legislatures and governors shorted and even skipped the state’s required payments. Now the General Assembly is scrambling to solve a Goliath-size fiscal problem: a $97 billion shortfall in the money needed to cover promised payouts to current and former employees who belong to five state pension systems, including public school teachers, judges and legislators themselves.
“It’s legalized robbery,” said Paul Morton, an office assistant for the Illinois Department of Health Care and Family Services who fears he won’t be able to afford his health care costs if his pension is significantly reduced or if he’s forced to drop his health insurance. Morton, 47, says his wife has diabetes, and he estimates half of his annual retirement would have to go toward insurance costs – a benefit the state had promised to fully fund after 20 years of service.
Two proposals, each sponsored by the head of each chamber, are competing for votes among lawmakers who want a deal before the Legislature adjourns May 31.
A plan sponsored by Senate President John Cullerton gives workers and retirees a choice of benefit packages, including the option of forgoing health insurance in retirement in exchange for 3 percent cost-of-living increases compounded annually.
Legislation proposed by powerful House Speaker Michael Madigan requires employees to contribute 2 percent more of their earnings to their pensions, delay retirement and accept less-generous annual cost-of-living increases.
Public employees and retirees say they feel betrayed, and forced into righting a wrong they didn’t cause – although some critics say public service unions also played a role in letting the dilemma grow because they consistently rejected many proposed solutions, such as 401(k)-type retirement packages.
But fearing that the state’s problem could get even worse, some have come to terms with the idea that it’s time for everyone who receives or will receive a public pension to sacrifice and help make the pension systems solvent.
“I think pension reform is necessary, but it has to be spread across the board so that everybody gives a little,” said Duane Brusnighan, 64, a grants manager at the Department of Commerce and Economic Opportunity.
He said he would be willing to collect a smaller pension as long as lawmakers come up with a plan that doesn’t leave retirees as the only ones paying for the solution.
“No one plan is exceptional. There isn’t one that’s good for everybody,” said Brusnighan, who might delay his retirement a few years. “But something has to get done.”
The uncertainty of which plan, if any, wins lawmakers’ approval is prompting some public employees to retire early in hopes of keeping some of the benefits that may be gutted from retirement packages if comprehensive pension changes are approved.
“I think it’s kind of a shame that so many teachers feel like they should go as soon as possible,” said Tom Heintzelman, reading and literature teacher at Virginia Junior High School in central Illinois. “It’s sad there are good teachers that will be leaving the profession as a result of this.”
Heintzelman, who has taught for 28 years at public schools, had planned to retire by the end of next academic year. But the 55-year-old has set June 7 as his last school day.
Barbara Franklin, who retired in 2000 after 37 years as a secretary at the University of Illinois, believes that if lawmakers truly cared about those who will be affected by the potential reforms, they would find other sources of revenue to cover the unfunded liability “instead of trying to solve the problem off the backs of retirees.”
Franklin’s pension is $28,000 – $9,000 more than when she retired, because of cost-of-living adjustments. Depending on lawmakers’ final decision, she said she may have to adjust her month-to-month budgeting.
“Some set aside their COLA increases to get the vacations or visiting their children who are in other parts of the country,” Franklin said. “Groceries go up, utilizes go up... Most of us are really looking at these (reform plans) as the best of two evils.”