Pension News - FABF

FROM THE RETIRED TRUSTEE WALTER CARLSON
2. I think the RHBC should have also recommended the continuation of a court supervised agreement.
That way, all parties would be covered under some extension of the existing agreement and we would
not have the nonsense, frustration, anxiety (or expense) of going back to court again and again. We
absolutely do not need to re-invent the wheel in this matter.
3. I also think the RHBC should have commented on the continuation of the current program of
administration of the annuitant program. I personally have been very satisfi ed with the operation
of the program. All items affecting all the parties; coverage, cost sharing, reconciliations etc. were
all embodied within the agreement.
However, the report was issued and we continue to wait. It’s been two months since the issuance of the RHBC report and
no formal announcement or decision has been made. Probably the biggest unknown in this entire equation is to what level
the Patient Protection and Affordability Act ("Obamacare") fi ts in and when retirees might be able to switch to plans that
will be available under the Act.
Supposedly, viable insurance exchanges, where retirees can fi nd competitively priced insurance, are to be operational in
the state of Illinois in 2014. These exchanges are supposed to provide alternative options for insurance at lower prices,
thereby relieving the former employer of the costs of maintaining the plan. I haven’t heard much of any progress on those
exchanges.
One of the RHBC panelists even wrote a nice editorial about funneling all the savings the city would reap when all of the
annuitants would be adequately covered under the provisions of this Act ("Obamacare") back to the funds as supplemental
pension funding. The sun was really shining that day.
There have been a few other things in the news about this issue. The Mayor indicated in an interview with Carol Marin a
couple of months back that he thought the program would continue beyond June 30, 2013 and that enough was budgeted
to run the program through the end of 2013.
A few of the Aldermen had a Budget/Audit Committee hearing on the matter and they reviewed all the fi ndings of the
RHBC report. They too recognized that the budget had enough money to fund the anticipated costs for all of 2013’s
Annuitant Health Care Program under the existing structure (no mention of the lack of subsidies) I’m not sure if that
alone is enough authority to continue the plan. I hope it’s OK to keep sending in our bills after June 30, 2013 under such
an informal arrangement.
The Mayor’s “Roadmap” plan for pension reform including reference to continuing retiree health care, was developed as
part of contract negotiations with the police sergeant's union. This was the fi rst time in my career (approx. 50 years worth)
that I have ever seen all of these items considered under the umbrella of contract negotiations. It was resoundingly voted
down.
So here’s the reality. The provisions of retiree health care are not covered under the more ironclad Illinois state constitutional
protection afforded to actual pension benefi ts. They know we’re out here waiting and they know June 30, 2013 is around
the corner. They know how much future retiree health care is going to cost. I think they might want to hold us hostage in
an attempt to bargain for changes to the pension benefi ts for existing city workers and retirees.
They know the cost breakouts at several different levels at which they can squeeze the annuitants to pay more. It is likely
that current workers and retirees might be asked to choose between future COLA increases in exchange for continued
retiree health care. The State is considering that now in various forms of legislative amendment and discussion.
I know these are diffi cult issues. I know that the uncertainty of health care is causing a great deal of anxiety, sleepless
nights and heartburn, I promise to keep retiree issues at the forefront of all pension business.
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