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Pension reform redux December 10, 2008

Posted by deepblueillinois in Uncategorized.
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Among the many other more visceral reactions I had to yesterday’s punch-in-the-gut disclosures that were contained in the complaint filed by U.S. Attorney Patrick Fitzgerald about further “pay-to-play” schemes was an immediate sense that we need to crisply refocus attention on implementing additional reforms which provide greater accountability and transparency in state government.

In an earlier post, “Building Better Mousetraps”, I laid out much of the case as to why major transactions such as pension and investment decisions are ripe for reform. So despite my public differences with Treasurer Alexi Giannoulias about his announced pension reform proposal, I met at the tail end of last week with the treasurer to air out our respective points of view. The meeting was very cordial, as it should be between two people who agree on roughly 90 percent of a far-reaching initiative. After all, the overwhelming majority of this sweeping reform package has won approval either in the House or the Senate over the passed couple of years, thanks to the deft touch of  my trusted BFF, Rep. Elaine Nekritz (D-Northbrook).

The most recent version of the sweeping accountability reforms was contained in Senate Bill 1305, which underwent numerous changes in both chambers before the strategic decision was made by the reformniks to let it simmer on the back burner a bit while devoting our primary attention to passing the “pay-to-play” ban into law. 

While I’m still not entirely sold on the upsides of consolidating all of the state’s retirement systems into a single “uberfund”, after meeting with him last week I’m now willing to give the treasurer the chance to make the case both publicly and through negotiations with the myriad of interested parties already revving up to engage in some serious political smackdown on this proposal. In my role as the Senate co-chair of the bipartisan Commission on Government Forecasting and Accountability  (“F & A” for the more risque types, “COGFA” for those more into beige), I’ve consulted with my solid House counterpart, Rep. Rich Myers (R-Macomb) and we’ve agreed to schedule hearings early in 2009 to delve into the accuracy of the purported cost-savings that would result from the proposed fund consolidation.

ssi0015245_p1Moreover, I’ve tentatively signed on to be the chief Senate sponsor of the reform plan, which makes sense since I’ve been feverishly pushing this reform boulder up the hill for the past few years. 

The ethics side of the line of scrimmage will also need some changes that place a greater premium on professionalism and a lesser degree on political clout. Some essentials here include writing into law the requirement that third parties pitching investment business be licensed     securities professionals, adding harsher penalties for willful violations of the securities industry’s existing prohibition against investment         banking firms using “independent contractors”, and requiring a broader universe of public pension fund trustees to disclose their economic       interests.

I can’t fault Treasurer Giannoulias for wanting to take on a monster issue either, as I’ve always felt that we can’t be content to nibble away at   the edges while failing to seize opportunities for meaningful change by the throat. 

More to come. Stay tuned.