Saturday, December 09, 2006

Better Late Than Never

I've gotten several requests to post last week's press release about closing the Cook County pension loophole, so here you go:

Fritchey, Claypool Seek to End Pension Boondoggles

Measure Would Close Existing Loophole

State Representative John Fritchey (D-Chicago) and Cook County Commissioner Forrest Claypool (D-Chicago) announced plans today to introduce legislation in the Illinois General Assembly closing the pension loophole used by retiring Cook County Board President Bobbie Steele to double her annual pension.

Steele resigned the county commissioner seat to which she won re-election on November 7, so that she can collect a retirement benefit based on her four month salary as President ($170,000) instead of her salary as county commissioner ($85,000). The move will boost her annual pension to $136,000 a year, with annual cost of living increases as well. Steele’s exercise of the pension law loophole will likely cost taxpayers in excess of $1 million in additional pension payments.

Six years ago, the General Assembly amended a nearly identical passage in the state pension law that applies to elected officials in every county in Illinois except Cook County. The amendment based pension payout on the average highest salary over a four-year period and not the final salary at the date of employment termination. Fritchey’s amendment would require Cook County to follow the same rules as the rest of the state.

“When you have a system that is ripe for abuse, it should come as no surprise when it gets abused,” said Rep. Fritchey. “Taxpayers in Cook County deserve the same accountability from their elected officials as do the taxpayers in every other county in Illinois. Closing this loophole is one step in that direction.”

Claypool noted that pensions for elected officials are by far the most generous—and that the addition of “sweeteners” or loopholes in the laws has often added even more generous returns to enterprising politicians.

“Politicians have consistently rigged the pension laws for their benefit, leaving taxpayers holding the bag,” said Claypool.

Both the Sun-Times and Tribune have revealed similar pension abuses. Former state Senator and County Commissioner Ted Lechowicz, for example, retired with a $130,000 pension despite never making more than $61,000 as an elected official. Similarly, former Sen. Art Berman’s yearly pension is $164, 612, almost three times higher than his salary with the state. Berman paid $109,292 into the state pension plan in his 31 years in the Senate.

After public disclosures of such pension manipulations, the General Assembly amended pension laws to prohibit similar abuses for officials elected after the date of the law. The Illinois Constitution prohibits pension rights from being modified retroactively.

In 2005, Cook County had $2.2 billion in unfunded pension liabilities, up from $85 million in 1996. The state is no better off. Years of scrimping on contributions, coupled with benefit increases, has left Illinois with an estimated $45.8 billion pension shortfall, which is among the worst funding records in the county according to the Chicago Tribune.


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