Synopsis: Illinois State Government is Insane in the Brain!!—What Is The Biggest Election Issue Affecting You and Me and Our Kids At Every Level And Is Being Ignored by All Candidates?

Editor’s comment: We are in the midst of an Illinois gubernatorial campaign. You and I can’t avoid watching television, print and other advertising about who should be our new IL Governor. What terrifying government financial issue in Illinois and Chicago and other local governments is directly threatening your livelihood, home values, jobs, families, schools, parks, churches/synagogues, the IWCC and just about everything any human in this State does? Why isn’t anyone talking about it?

Do we all understand the same crucial issue has made our State operate in what you and your family should understand is a ‘bankruptcy’ to the extent there are about $17 billion, yes, $17,000,000,000 in unpaid IL State bills right now? Aren’t you and I ‘bankrupt’ when we can’t and our State won’t pay almost any of our bills on time? Moody’s Investor’s Service pegged our State’s debt from this issue at $251 billion last June! It has to be around $275-300 billion or more by now because no one is paying that spiraling debt down a dime. It rises by several million dollars every hour of every day. Seems fairly important to me—how do you feel about it?

Please note the same issue is threatening to bankrupt and crush the economy of Chicago. The same issue is impacting lots of other municipalities across Cook County where County Treasurer Maria Pappas reports small, medium and big municipalities under her watch now have $139 billion or $139,000,000,000 in unsecured and soon to be crushing debt that has risen 30% in the last six years. At that rate, in seven years or less, it will be over $200B and rising…!

I have reviewed the campaign websites of J.B. Pritzker and Chris Kennedy who are both running on the Democrat side for governor—Chris Kennedy mentions this stealth issue on his website with no true recommendations for reform. J.B. Pritzker’s website doesn’t even mention it. Governor Bruce Rauner’s website doesn’t mention this one a teensy bit. Yikes. I am sure Governor Rauner is appalled by all of it and working quietly to change it; I just consider it odd that he isn’t mentioning it.

The Top-Secret “Stealth” Election Issue Is Fake IL Government Pensions!

A great example of how nutty these fake gov’t pensions are was reported by the Chicago Tribune last week when they chronicled the massively high retirement package of former U. of Illinois Athletic Director Ron Guenther. We are not blaming Mr. Guenther for this whole morass but please learn from it. The Tribune article indicates Mr. Guenther’s career contributions to his retirement program totaled about $615,000 including interest. Sounds like a lot of money, right? Well, as you read this, Mr. Guenther is receiving about $40,000 every month or about $473,094 a year for this current year. Please remember he is getting that money NOT to work.

Please also remember insane-in-the-brain Illinois government has to pay annual fake gov’t pension increases of 3% compounded on an annual basis. As Mr. Guenther is only 72 years young, he will be getting over $500,000 a year in 2019. In nine years, he will be getting more each year than his entire career fake pension contributions or more than $50,000 a month and $617,000 a year. If he lives 20 years to 82 and lots of folks are living that long, he will be getting $854,000 a year. In 26 years, you and me and our kids and grandkids will be paying Ron Guenther more than $1M a year not to work. These increases and payments are guaranteed by the IL Constitution.

Please also note his total expected retirement income can and will be well into the tens of millions of dollars. When I hear complaints the State didn’t properly “fund” that pension, I ask anyone of my readers to tell me how much our State gov’t would have to put into his pension to fund $10M to $30M that he will probably receive in retirement. The amount would be staggering—in essence and in my humble view, such a fake gov’t pension (and hundreds like it) are “unfundable.”

Please also note former AD Guenther doesn’t have to pay a dime in IL State income tax on the money, despite the fact he will receive millions over his contributions. Every dime will be tax dollars coming from you and me and your kids and grandkids—he is already way past any fake pension contribution he made or we matched while he was working. As I indicate above, there are supposedly at least 700,000 former Illinois government workers now on fake gov’t pensions and the debt just keeps rising and rising. As you read this, I assure you both judges/justices in the Judicial Retirement System and General Assembly members in the GARS fake pension system are hilariously under-funded/unfundable. The IL State and local gov’t retirement benefits are so high as to be wholly shocking. They are financial engines that foretell financial doom for our gov’t, like the City of Detroit, the country of Greece and Puerto Rico.

This whole unspoken gov’t concept is going to “break” or explode into failure/Armageddon when Wall Street cuts off borrowing or won’t underwrite bond issues to all these nutty IL government entities who are rated slightly above junk status right now. Gosh only knows what that will do to jobs, home prices/sales, schools and everything else. How can our elected officials ignore it and sweep it under the nearest rug?

Why Isn’t Anyone in the Election Talking About This Financial Insanity?

In a word(s)—IL government unions. Huh? Well, as I have advised government unions don’t appear to care about bankrupting our State or the City of Chicago and various municipalities chronicled by Cook County Treasurer Maria Pappas. In fact it appears to me they want to keep it all hush-hush so no one is discussing it on the election trail or any website. If that is incorrect, please, please tell me their financial approach to openly reforming all of it and I will publish with my deepest apologies.

In my view, any candidate for Governor who talks about it is going to be cannon-balled and the government unions are going to fight like the dickens and send hundreds of emails to their members to attack/block/defeat that noble candidate. They won’t go head on but they will spin their PR spins to try to block such fake gov’t pension discussions and tell their members to vote and organize friends and relatives to vote “against” anyone who won’t support this financial insanity.

Thoughts For How To Stop This Craziness.

Ask your favorite candidate for IL Governor and keep asking:

· Do you support ending fake unfunded/unfundable gov’t pensions?

· If we realized our mistaken and immediately stopped this madness for all new and incoming gov’t workers and paid off the lucky folks who are vested in them, when would our State and local governments and taxpayers be free at last?

· Why can’t we provide 401K’s to new gov’t workers and save zillions?

· If we are going to keep over-compensating State and local workers at work and in retirement, how do we start cutting/laying off some of these grossly overpaid and “over-retired” gov’t workers and use private and competitive companies for State work?

How About the 28th Amendment to the U.S. Constitution?

Governor Rauner is bravely trying to get federal help to rein in our impossible-to-fund gov’t pensions. One thought is to change/amend the U.S. Constitution to protect all U.S. taxpayers from this massive fake gov’t pension rip-off. Someone please write an amendment that guarantees present and future gov’t workers across our nation can only retire on

1. Their fake gov’t pension contributions

2. Matching gov’t contributions while they were working and

3. Any interest earned on both at any time.

4. When that is gone, you can’t come to taxpayers for another penny because it isn’t a ‘pension,’ it is sort of like stealing because you aren’t doing anything to invest in it or earn it.

We appreciate your thought and comments. Please post them on our award-winning blog.

Synopsis: Indiana Reports Lowest Workplace Injuries and Illnesses in State History. Research and analysis from our top IN WC/GL Team Leader, Kevin Boyle, J.D.

Editor’s comment: The Indiana Department of Labor (IDOL) released the annual nonfatal workplace injury and illness report for 2016 and its good news. Indiana's nonfatal occupational injury and illness rate is the lowest in state history with an estimated 3.5 injuries or illnesses per 100 full-time workers. This represents an eight percent decrease from 2015's previous historically low rate of 3.8, and the fifth consecutive year the injury and illness rate has been at or below 4.0.

“We are proud of our Hoosier workforce and their dedication to maintaining safe and healthy workplaces,” said Rick Ruble, commissioner of the Indiana Department of Labor. “Indiana's employers and employees continue to make workplace safety a top priority. Partnerships with organized labor, trade associations and safety councils, as well as Indiana's IOSHA enforcement and INSafe programs, help ensure that workplace safety is more than a buzzword. It's a culture.”

Here are some other important findings in the new 2016 report:

The overall state nonfatal injury and illness rate for 2016 is 3.5 injuries or illnesses per 100 full-time workers, the lowest rate since the federal Bureau of Labor Statistics' Survey of Occupational Injuries and Illnesses (SOII) report was introduced in its current form in 1992. The 2016 rate represents a one-year decline of eight percent from the previous historic low rate of 3.8 in 2015.
15 of 19 major Indiana industry classifications experienced a decrease in nonfatal worker injury and illness rates.
The finance and insurance industry experienced the greatest one-year decline in nonfatal worker injuries and illnesses, 60 percent.
The Indiana construction industry remained steady with the 2015 rate of 2.8 per 100 fulltime workers. ? The Hoosier manufacturing industry saw a 13 percent decrease in injuries and illnesses from the 2015 rate of 4.7 to 4.1 in 2016.
The Hoosier agriculture industry nonfatal worker injury and illness rate saw a one-year 39 percent decrease from 7.1 in 2015 to 4.3 in 2016.

This article was researched and written by Kevin Boyle, J.D. He can be reached for any question about legal defense in WC, GL and EPLI for IN clients at kboyle@keefe-law.com.

We appreciate your thought and comments. Please post them on our award-winning blog.

Synopsis: When Illinois Courts Review Firefighter Pension Claims, They Usually Pick the Highest Possible Value. Research and analysis by Carolyn Ettelson Klein, J.D.

Editor’s comment: The IL Appellate Court recently affirmed the trial court’s judgment to reverse the amended decision of the Firefighters’ Pension Fund of the City of Moline (Board) and reinstated the Board’s original decision to grant a firefighter (Plaintiff) his line-of-duty disability pension calculated at the salary he was receiving on the last date he was on the payroll, an amount much higher than the salary attached to his rank if the court had interpreted “removed from the payroll” as the date at which Plaintiff began receiving TTD benefits payments. The Court reasoned the IL Pension Code, the interpretation of which is pivotal to this case, must be liberally construed in favor of Applicant. The Court determined Plaintiff’s last day on the city payroll is the day he signed WC settlement contracts and stopped receiving TTD payments, thereby entitling him to a pension based upon 65% of the “rank-attached” salary he would have been receiving at that time.

Editor’s comment: Sottos v. The Firefighters’ Pension Fund of the City of Moline is a decision rendered by the IL Appellate Court primarily under section 4-110 of the Illinois Pension Code (Pension Code) determining Plaintiff’s last day on the city payroll was the day he signed workers’ compensation settlement contracts, thus entitling him to accumulated vacation time and compensatory time calculated at the higher salary level of $75,674.93 attached to his rank on March 7 , 2014 rather than the lesser salary of $73,829.32 attached to his rank on March 8, 2013. Defendant asserted the first TTD payment, is the last day Plaintiff was on the firefighter’s payroll.

The Board initially determined Plaintiff’s last day on the payroll was March 7, 2014 and calculated Plaintiff’s line of duty pension based upon the salary attached to his rank on that day and he would receive a monthly disability pension benefit of $4,099.06, 65% of the monthly salary attached to the Plaintiff’s rank. Plaintiff received a lump sum payment consisting of unused vacation time and compensatory time (without pension withholding). Of their own volition, the Board subsequently motioned to reconsider its own ruling on Plaintiff’s application for line-of-duty disability pension benefits.

The Board held a hearing in September 2014 to reconsider its previous ruling. The City’s HR manager (Fleming) testified Plaintiff’s annual salary attached to his rank was $72,204 prior to February 27, 2013, after which his salary increased to $73,829.32 due to an anniversary increase. Fleming testified in accordance with the Public Employee Disability Act (Disability Act) (5 ILCS 345/0.01 et seq. (West 2012), Plaintiff received full pay with pension contributions withheld throughout March 8, 2013 at which time the city began paying workers’ compensation TTD benefits to Plaintiff, benefits based upon Plaintiff’s 2013 salary.

In May of 2013, the City stopped withholding pension fund contributions from Plaintiff’s payments. The city instituted a general wage increase for firefighters in January of 2014. Fleming contended Plaintiff would have received said wage increase had he been eligible for the same. Meaning, Plaintiff was not on payroll at the time of the increase and ultimately could not have Pension Disability Benefits calculated based upon an increased wage he was not eligible to receive as Plaintiff’s last day on the payroll was in February 2013. Fleming asserted the City erroneously paid Plaintiff a lump sum based upon the new higher salary of $75,674.93 and the monthly disability pension benefits should thus be reduced to $3,999.09 and a refund to Plaintiff for excess pension contributions withheld after March 8, 2013.

The Board entered an amendment to its initial ruling, and did so without stating why. In 2014, Plaintiff filed a complaint for administrative review of the Board’s decision. The trial court reversed the Board’s amended decision, reinstated the original decision which was to pay Plaintiff his monthly line-of-duty disability pension benefit based on the salary attached to his rank in March 2014. The Board appealed, and lost.

The liberal interpretation of the payroll clause in favor of Plaintiff required the Court rule the correct date Plaintiff was removed from the City’s payroll was in March 2014, thereby entitling Plaintiff to his lump sum payment based upon his higher “rank-attached” $75,674.93 salary which would entitle him to $4,099.06 (65% of that salary) on a monthly basis.

The Appellate Court’s ruling was consistent with an Illinois Department of Insurance (IDOI) advisory opinion from 2016 wherein, for the purpose of Section 4-110 of the Pension Code, workers’ compensation benefit payments by a municipal employer constitute being “on” the municipality’s payroll. In Roselle, a disabled employee was still considered on the municipality’s payroll throughout the time the city paid workers’ compensation TTD benefits.

The Appellate Court assigned the IDOI opinion what they felt was appropriate weight and thereby reversed the Board’s amended decision, reinstated their initial decision and affirmed the trial court’s judgment.

It should be noted that in calculating disability pension benefits based upon the “rank-attached” salary at the time an employee is removed from payroll may result in an exponential increase to malingering Petitioners. As defense attorneys, we should be cognizant of the motivation this creates for city employees not to settle their claims and extend them to get more money. We should consider the possible perspective of the Petitioner–a salary raise is next week, next month (possibly soon), so if they can hold off settlement and remain on TTD a little longer, disability pension benefits will be based upon 65% of a higher salary-

The Appellate Court has decided IL workers’ compensation TTD benefit payments constitute “salary” for the purpose of the Pension Code. The benefits hinge upon the salary an employee was earning at the time he or she became disabled. Therefore, employees receiving these benefits are effectively entitled to monthly pension payments based upon calculations for a raise not “earned” during service.

This article was researched and written by our latest and greatest addition to the Keefe, Campbell, Biery and Assoc. defense team, Carolyn Ettelson Klein. She can be reached for questions and concerns at CKlein@keefe-law.com.

KCBA Blog

11-13-2017; Illinois Gov't is Insane in the Brain!!—Why Won't Anyone Discuss Our Biggest Election Issue?; Kevin Boyle, JD on IN Low Injury Rates; Carolyn Klein, JD reviews New Firefighter Ruling