Union supported bad pension policy

by:  Paul Kersey

Illinois Policy Institute

As Illinois government pensions continue to deteriorate, union officials argue that they are not to blame; that the fault lies with politicians who failed to fund pensions. For instance, the union pension lobby group “We Are One Illinois” argues that, “[F]or decades, Illinois politicians shorted or skipped the employer contributions required by law, creating the nation’s largest pension debt. All that time, public employees paid their fair share.”

The truth is quite different.

First, many government workers contributed less than their fair share thanks to “pension pick-ups,” in which employers agreed to make pension fund contributions that were supposed to be made by employees.

And now Reboot Illinois has uncovered proof that when Illinois authorized a two-year, $2.3 billion pension holiday, three key unions were all in support  — the Illinois Federation of Teachers, Illinois Education Association and Service Employees International Union.

The pension holiday meant that the state would not make its contribution for pensions, either. Reboot discovered that as the bill authorizing the “holiday” worked its way through the General Assembly, lobbyists representing these three unions filed witness slips in favor of the bill and the pension holiday.

So government worker unions have to accept a big chunk of the blame. They negotiated pension pick-ups so their members didn’t always pay their fair share, and then they allowed the state to take holidays and skip making its payments, too.

Defined benefit pensions look like a nice idea on paper, but there are just too many temptations for politicians and union bosses to cut corners and renege on their promises. Union officials should quit pretending innocence — their story just doesn’t hold up. And government workers should insist that the state and local governments move toward defined contribution retirement plans that workers control themselves.

Paul Kersey
Director of Labor Policy
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