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Lawmakers Look For Pension Loophole Fix

By Benjamin Yount | Illinois Statehouse News
October 12, 2011

SPRINGFIELD — Illinois lawmakers are trying to close pension loopholes — they created — that are allowing union leaders to cash in on public pensions.

Legislation from state Sen. Matt Murphy, R-Palatine, and House GOP Leader Tom Cross, R-Oswego, targets these labor leaders who are collecting taxpayer-guaranteed pensions based on the time and salary they acquired while working for their unions.

Dave Commerford, spokesman for the state’s largest teachers’ union, the Illinois Federation of Teachers, or IFT, said the union is “reviewing the legislation and has no further comment at this time.” Calls to the teachers’ union Illinois Education Association, or IEA, were not returned.

Murphy’s proposal, Senate Bill 2499, takes action against education union leaders with the IFT and IEA as well as the Illinois Association of School Board, an organization that helps school boards with professional development and is indirectly funded by taxpayers. The proposal seeks to prevent the leaders from using their jobs with the unions or association to pad a pension they earned inside a classroom or school building.

“The most glaring examples of what we’re trying to get to, frankly are in the Teachers’ Retirement System, where you have individuals who have worked for years for a union, who are using their time in the union and their final salary from the union, to set their public pension,” said Murphy.

Murphy is quick to point to Reginald Weaver, former head of the country’s largest teacher union, the National Education Association, who is collecting $242,000 annually based on his salary working with the union. Weaver earned just $60,000 as a middle school teacher in 1996 in Harvey, Ill.

An investigation by Illinois Statehouse News found that 119 union and nonprofit leaders are eligible for taxpayer-guaranteed pensions. Sixty union officials and other non-governmental workers are collecting those pensions.

“These union leaders … have been paid handsomely through teachers’ dues for year, and were supposed to have the backs of these rank-and-file teachers,” Murphy said. “This individual, Mr. Weaver, is taking out six times as much as the average teacher from their very pension fund.”

Weaver and other labor leaders in Illinois are taking advantage of vague language in a 1991 law that allows union leaders to maximize their pensions by basing their taxpayer-backed retirement income on their salary and years of service in their unions. That law was enacted under former Republican Gov. Jim Thompson’s administration.

Murphy, however, said closing the 1991 loophole will require help from Democrats who control state government.

“My hope is that my friends on the other side of the aisle will recognize the need to address, not only a fairness issue with this, but also the cynicism from taxpayers toward their government for even allowing this type of insider deal,” Murphy said.

State Rep. Dan Biss, D-Evanston, is leading a House working group on pension reform. However, Biss didn’t comment Wednesday on Murphy’s legislation or any other pension-reform measures that may go before the General Assembly.

“We want to have open and honest discussions at this point,” Biss said.

Cross said he plans to ride the coattails of stories from the Chicago Tribune and WGN television in Chicago that highlight union leaders who have used the 1991 loophole to force pension plans though the Legislature.

“Unfortunately, top union officials used a questionable interpretation of the pension law that allowed them to use a loophole in to grab two or sometimes three pensions,” said Cross.

Cross’ proposals are:
House Bill 3832 would bar union leaders from avoiding criminal charges of pension fraud if they are collect union and City of Chicago pensions.
House Bill 3827 would replace members of the City of Chicago and Cook County pension boards to promote accountability to taxpayers.
House Bill 3813 would repeal a portion of the 1991 law that allows City of Chicago employees to retire with a city pension based on their higher union salary. The bill would allow union officials to accept a city pension based on their city salary when they left public service.

“You should only get a public pension for public work,” said Murphy of the measures.

Adam Andrzejewski, a former GOP candidate for governor and founder of the taxpayer advocate group For the Good of Illinois, which calls for “limited, accountable and transparent government,” said most people statewide would agree that public pensions should be only for public work.

“This legislation defends the hard-working public employee, the hard-working teacher who pays into their (retirement) system,” said Andrzejewski. “The systems are, literally, being drained by tens of millions of dollars from non-government entities like public-sector unions (and) the nonprofit groups.”


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