Monday, October 02, 2006

Pensions To Be Based on Phantom Salaries

Being a retired (or fired, as I like to say about my primary loss-induced retirement) legislator gets me some “heads ups” that others don’t get.

One was contained in the most recent newsletter of the General Assembly Retirement System.

Did you know that legislators who are defeated this fall (plus those who are retiring for whatever reason) will receive pensions based on salaries they never received?


Most will be based on figures $11,000 higher than they have ever been paid.

That’s what the General Assembly Retirement System says.

Why?

Because the Compensation Review Board recommended 13.1% in cost-of-living raises that the legislators didn’t take from 2003-2005 and the legislators haven’t rejected it yet.

(The Compensation Review Board was the brainchild of State Rep. Peg Breslin. She got it passed so legislators would not have to vote for their own pay increases. The Board recommends salary increases, which go into effect if both houses of the General Assembly don’t reject them in the same motion. Thus far, they have not done so. But they still have the veto session and the early part of 2007 in which such a miracle might happen. After leaving the General Assembly, Breslin is now a retired appellate court judge.)

Another 3.2% will be added on top of that for this year’s COLA because of the Board’s recommendation.

That’s a 16.7% retirement “kicker.”

So, even though a committee chairman or spokesman (and virtually every House member is one or the other) earns $66,390 a year, retiring members will have their pensions based on a $77,477 salary level.

It doesn’t matter that they will have never been paid that much, that will be their salary base.

And, the difference--$11,087—will also be seen as a salary jump for most legislators next session, if they don’t vote down the Review Board’s recommendation.

To read the pension plan logic, find the link in the McHenry County Blog version of this article.

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