Although there were several reasons for the 1970 Illinois Constitutional Convention, public pensions became a major subject of discussion in the weeks before the delegates gathered. Elmer Getz, the Chair of the Convention’s Bill of Rights Committee, wrote: “I began to receive an extraordinary number of communications on the pension and retirement rights of government employees, particularly those connected with state universities. These people were sold the idea that their rights were imperiled and that they would be left destitute or, at the very least, prejudiced, unless the Bill of Rights contained a protective provision in their behalf. I received hundreds, if not thousands, of letters and petitions from them.” In addition, the Chair of the Local Government Committee received many letters from police and fire fighters concerned that the municipalities, newly granted home rule authority, would use it to slash or eliminate pension benefits. In the days before the Clause was introduced, all convention delegates received a letter from the chair of the Employees Advisory Committee to the State Universities Retirement System arguing that constitutional protection for pensions was necessary because “the State Legislature has failed to finance the pension obligations on a sound basis.”
On July 1, 1970, Republican delegate Helen Kinney – seconded by Chairman Gertz – offered the original version of the Pension Protection Clause. The clause was in substantially the form ultimately approved, both providing that (1) pensions were a “contractual relationship,” and that (2) benefits “shall not be diminished or impaired. The Clause expressly authorized increases in benefits. Delegate Kinney’s resolution asked the Rules Committee for a recommendation as to where the Pension Protection Clause belonged in the constitutional structure. (For the transcripts of the Convention debates, see here.)
The Rules Committee ordered that the Clause be considered as part of the legislative article in order to enable it to be part of the first reading. Three weeks later, the debate on the Clause resumed. By this time, the Clause had picked up eighteen additional co-sponsors, and the language expressly reserving the right to increase benefits had been dropped.
In the first moments of the debate, Delegate Kinney explained that “the word ‘enforceable’ is meant to provide that the rights so established shall be subject to judicial proceedings and can be enforced through court action. The word ‘impaired’ is meant to imply and to intend that if a pension fund would be on the verge of ‘default or imminent bankruptcy, a group action could be taken to show that those rights should be preserved.”
Kinney explained that her interest in the issue had flowed from her acquaintance as a criminal prosecutor with many police officers and fire fighters who were alarmed by the prospect of home rule. “I think that this would simply be a means of giving them assurance that these benefits will not at some future date be eliminated on the part of municipalities who do contribute to these funds,” Kinney said. Delegate Kemp observed that the purpose of the Clause was “to make certain that irrespective of the financial condition of a municipality or even the state government” that retired employees “could at least expect to live in some kind of dignity during their golden years.”
Delegate Parkhurst, an opponent of the Clause, next warned that the Clause would inevitably lead to arguments – if not a court ruling – that pension funds had to be fully funded at all times. “If we are going to get to the point in the state of Illinois where we can’t pay the pensions,” he observed, “we’re down the drain anyway.”
Delegate Elward also spoke in opposition to the Clause. Endorsing Parkhurst’s comments, Elward observed that if the Clause didn’t require full funding by the government “it doesn’t do anything.” As written, he argued, the Clause seemed to require that “the present structure is to be frozen in for all time to come.” Delegate Borek opposed the Clause as well, arguing that the words “diminished or impaired” suggested that “the treasury of the state of Illinois would guarantee 374 pension funds, should they go broke, they will reimburse them to the extent that they can operate.”
Vice-President Lyons, a supporter of the Clause, denied that the Clause was intended to require full funding – “nobody’s got that kind of money.” According to Delegate Parkhurst, the Local Government Committee had talked extensively to police and fire fighters, and had explained to them that restrictions on home rule would prevent local governments from invading pension funds. Parkhurst said that he had believed that the “furor that descended upon the Local Government Committee” was “pacified and settled and solved” by that explanation. But the Clause being proposed was much broader in scope, he said.
Delegate Kinney explained the sponsors’ intentions in detail:
Benefits not being diminished really refers to this situation: If a police officer accepted employment under a provision where he was entitled to retire at two-thirds of his salary after thirty years of service, that could not subsequently be changed to say he was entitled to only one-third of his salary after thirty years of service, or perhaps entitled to nothing. That is the thrust of the word ‘diminished.’ It was not intended to require 100 percent funding or 50 percent or 30 percent funding or get into any of those problems, aside from the very slim area where a court might judicially determine that imminent bankruptcy would really be impairment . . . It is simply to give [employees] a basic protection against abolishing their rights after they have embarked upon the employment – to lessen them.
In our next post, we’ll continue looking at the July 21, 1970 debate of the Pension Protection Clause.