Illinois, New Jersey and Michigan Taking the Pension Fight to the Courts

Teachers and education support professionals are no different than other working Americans: they sacrifice and save to be able to retire with modest, secure benefits. But as some politicians increasingly try to balance budget shortfalls by withholding or cutting payments to the pensions of educators and other public employees, educators and other workers are turning to the courts to prevent lawmakers from walking away from their legal obligations.

The most recent examples come from New Jersey, Illinois and Michigan.

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In New Jersey, educators last week said they “will pursue every legal avenue” to stop Gov. Chris Christie from taking $2.43 billion meant for the state’s pension system. Elsewhere, the Michigan Supreme Court announced last week it will review whether Gov. Rick Snyder and state legislators violated contracts between the teachers’ unions and the state’s teacher retirement plan. And in Illinois a state judge ordered that the implementation of a new law be blocked while the courts review the law’s constitutionality.

Contrary to the perception promoted by ALEC, extremist politicians and other anti-public sector groups, teachers, police officers, firefighters, nurses and public employees do not receive gold-plated pensions. The median public pension benefit in 2007 was $20,947. Workers contribute a fixed percentage of their salary into their pension funds. Historically, almost 75 cents of every dollar paid in pensions come from investment returns, not tax dollars. In those states with underfunded pension funds, typically politicians have for years shorted or skipped the employer contributions required by law.

New Jersey public school employees say Christie’s plan to take money budgeted for the pension fund is particularly offensive in light of an overhaul signed by Christie in 2011 that shifted more pension costs to public workers, raised their retirement age to 65, and froze yearly cost-of-living adjustments. Christie has ruled out raising taxes on the wealthy to balance the state’s budget.

New Jersey Education Association President Wendell Steinhauer called Christie’s maneuver an “illegal, irresponsible and reckless proposal.

“As a candidate, he pledged to educators that ‘nothing about your pension is going to change when I am governor,’” Steinhauer said in a statement.

In a one-sentence order, the Michigan Supreme Court last Wednesday granted an appeal of a lower court ruling. Retired teachers contend that changes to state law disregard promises made by the state in pamphlets, brochures and other documents regarding the retirement system.

In Illinois Sangamon County Circuit Court Judge John Belz issued a temporary restraining order two weeks ago blocking a new law, which affects most elementary and secondary school teachers and state employees outside of Chicago. The lawsuit is one of five that maintain the law unconstitutionally deprives workers of retirement benefits they have earned. According to the lawsuits, the law violates the provision in the Illinois Constitution that states that membership in a public pension system is an enforceable contractual relationship, “the benefits of which may not be diminished or impaired.”

High school teacher and Illinois Education Association President Cinda Klicka said, “We had a victory today in being granted this stay. Now we’ll wait to see what the court says about the entire case.”

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