Executive Director Reports

Standing our ground on pensions

 Roberta Lynch

Roberta Lynch

December 2014-January 2015

As life expectancy increases and more Americans can assume not years, but decades, of retirement, concerns about how we will sustain ourselves over that time have begun to grow as well.

While Social Security remains the bedrock of financial stability for the elderly, it provides only enough to ward off poverty. To assure that the golden years actually have a little bit of gleam, workers have always counted on supplemental retirement income, primarily in the form of employer-provided pension benefits.

This has been particularly true in the public sector where jobs often paid less than in the private sector, but benefits, especially guaranteed retirement benefits, were a key element of the compensation package. 

“Guaranteed” is the operative word. The defined-benefit pensions that were once so widespread in this country assure a fixed monthly benefit that cannot be altered no matter how long a person lives. Yet it is a historical irony of the first order that as life spans have steadily lengthened, a concerted effort is now underway to erase such pension plans from the employment landscape.

Over the past three decades, many private-sector employers have wantonly shed their defined benefit plans in favor of risky 401(k) plans that do not provide a fixed monthly income. Not coincidentally, this massive transfer of liability for retirement security from big employers to lone individuals occurred in conjunction with the steep decline of union representation in the private sector, and – another non-coincidence – the rapid growth of a financial sector that made billions off these new forms of retirement investment.

So we come to the pitched battle raging today to preserve defined-benefit pensions – guaranteed retirement security – for millions of employees at every level of government. Because union representation—with its potential for collective action--remains widespread in the public sector, public employees have not passively surrendered their pensions, but rather have risen up to defend them.

Nowhere is this battle more hard-fought than here in Illinois, where both state and local governments have failed spectacularly in their responsibility to make pension fund contributions – even as employees have faithfully made theirs. Rather than honestly confront the revenue measures needed to pay for government services vital to the well-being of citizens, politicians simply “borrowed” from employees’ retirement funds.

Now that the piper must be paid, those officials are singing a different song. Suddenly it’s all about fiscal responsibility, with a chorus that seeks to shift the blame onto the only trustworthy party in this whole mess – public employees themselves.

The state’s corporate elite, with a multi-million dollar war chest, launched a campaign with a single goal: drastic restructuring, possibly even elimination, of public pension plans.  Political leaders of both parties quickly climbed on the bandwagon.

“Illinois is broke” became their mantra – and public employees became their scapegoats. Legislation to slash pension benefits to the bone quickly emerged in the state legislature. 

In response, AFSCME helped lead the way in forging an unprecedented coalition of labor unions representing public sector employees. Teachers and state employees, as well as police officers, firefighters and other local government workers came together to form the We Are One Illinois coalition.

Pooling resources and developing joint organizing strategies, the union coalition acted swiftly to redefine the issue in the public mind. It developed a major public relations campaign of its own, with compelling TV ads that put a human face on the nurses, EMT’s, teachers and other employees who serve the public every day and making the case that it was politicians, not employees or retirees, who had driven Illinois into such a deep fiscal hole.

The coalition also launched the most massive grassroots lobbying effort ever seen in Springfield, arguing that pension cuts not only harmed workers’ retirement security, but also violated the protections embedded in the state’s constitution. Union members flooded legislators with phone calls and e-mails, visited them, picketed them and, more than once, packed the Capitol rotunda in protest.

For two years, this intensive pressure beat back the state’s entire power structure. And when that elite finally did succeed in pushing through a pension-cutting bill in early 2014, the battle didn’t end there. We Are One Illinois immediately headed to court, securing an injunction that prevented the new law from being implemented.

In November, union members won the biggest round yet when the circuit court declared that law null and void “in its entirety,” directly affirming that public employee pensions are protected by the state constitution.

As public employees now await a final ruling from the Illinois Supreme Court, it is worth reflecting on how far we’ve come and how we got here. Working together through our unions, public employees had a voice in the political, legislative and legal systems – and with that voice we have clearly asserted that dignity and security in retirement is vital for all.