By: Eric Peterson
May 15, 2012
“Cook County Board Commissioner Bridget Gainer believes open discussions with county employees is the way forward in reforming a pension system she believes is unsustainable.
As the chair of the county board’s Pension Committee, Gainer, of Chicago, and fellow Commissioner Tim Schneider of Bartlett last week laid out a new plan they say goes beyond earlier talks in Springfield by being open to the input of labor. But union officials Tuesday said no formal proposal has been put forward — and were unhappy with the suggestions made by Gainer on the website OpenPensions.org.
Among the suggested changes for current workers is increasing retirement age eligibility by five years, so that employees with 30 years of service could retire at 55 instead of 50, or at 65 instead of 60 after 10 years of service. The latter group of employees could retire between ages 55 and 65, but would see their benefits reduced by half a percent for every month before age 65 they retire. Employee contribution toward pension would be increase by one percent, and the benefit multiplier would be reduced from 2.4 percent to 2.2 percent under the plan outlined by Gainer and Schneider.
Cost of living adjustments for both current and future retirees would be reduced from 3 percent per year to either 3 percent or half of the rate of inflation, whichever is lower. For example, when the rate of inflation is expected to be 3 percent, the cost of living adjustment would be 1.5 percent.
“This isn’t a burden that can be put on the taxpayers,” Schneider said of pension reform.
Anders Lindall, spokesman for the American Federation of State, County and Municipal Employees Local 31, said the proposal is both unfair and unconstitutional. “The draconian cuts outlined on this page would saddle police officers, nurses and other county employees with the entire burden of solving the county’s pension funding system alone,” said Lindall, whose local represents about 5,000 Cook County employees.
The union agrees there is a problem with the Cook County pension system, but Lindall called it a problem of adequate funding, not overgenerous benefits. He said the average annual pension of a county retiree is $32,000. The current problems were largely caused by two factors — the failure of past county board commissioners to make adequate contributions to the pension system, and the financial collapse of 2008, which hurt retirement portfolios, he added.
Nick Kaleba spokesman for the Chicago Federation of Labor, said no specific proposal for reform has been presented to workers. “I think everything is fluid right now,” said Kaleba, whose group is an umbrella organization to all the unions representing Cook County employees.
Gainer and Schneider said the county currently is paying $200 million a year from property taxes to the pension system, and that taxpayers can’t be asked to help any more. They tout the plan as a way to keep the system viable beyond its forecast point of exhaustion in 2038.
Gainer noted that any pension reform plan must be approved by the state legislature. But she also believes it’s important that it be seen by and pass muster with the employees it’s affecting.”