From the Chicago Tribune
By Jason Grotto, Tribune reporter
October 12, 2011
At least eight Chicago labor leaders who are eligible for inflated city pensions also stand to receive union pensions covering the same work period, thanks to a charitable interpretation of state law by officials representing two city pension funds, a Tribune/WGN-TV investigation has found.
By double and even triple dipping on pensions, these union officials stand to reap millions more in retirement while thousands of rank-and-file union members face hard times and city pension funds stagger toward insolvency. [Emphasis added]
Union pension benefits are not public record, but the Tribune and WGN-TV obtained information confirming that at least seven union officials are accruing benefits in multiple pensions and another retired official already is receiving money from two pensions. [Emphasis added]
One labor leader stands to reap more than $400,000 a year from three pensions — the city laborers fund, a union district council fund and a national union fund — all covering the same time period. During his expected lifetime, he stands to receive approximately $9 million, according to an analysis based on the funds’ actuarial assumptions.
Union officials are accumulating these benefits even though the state pension code includes language aimed at preventing double dipping.
Pension experts, state lawmakers and attorneys specializing in pension law say the spirit of the statute clearly prohibits labor leaders from receiving a second pension from funds established by their locals, although it does appear to contain a loophole that allows pensions from national unions.
City pension fund directors and their attorney, Fredrick Heiss, say that the law is vague and that if the Legislature had wanted to bar labor leaders from participating in union pension plans, they would have said so more clearly.
“The Legislature never told us how to administer this thing,” Heiss said. “They could have said ‘no second pension at all,’ but they didn’t say that.”
What the law does say is this: Union leaders who benefit from city pensions cannot “receive credit in any pension plan established by the local labor organization based on his employment by the organization.”
Heiss and other pension fund officials argue that a union district council is not a local labor organization, even though it is based in a Chicago suburb and Chicago-area locals helped create it.
Under that reading of the law, a union official would be barred from receiving two pensions for the same period only if he worked for a labor organization that had established its own pension fund for its staff. Only two union groups doing business with the city have done so. Leaders of the roughly 40 other organizations could receive union pensions because the groups pay into the district council’s fund or another type of fund.
Pension experts question whether that interpretation would hold up in court, calling it illogical and narrow at best.
“I don’t find their argument convincing. This is really a local pension plan because the local is paying for the pension,” said Gus Fields, one of the country’s leading pension attorneys, who represents numerous government pension plans.
The double dipping by union leaders exposes another problem in the state’s broken pension system and rankles those trying to fix it.
“Can you name any place in the world where someone can get two pensions for the same job?” said state Rep. Tom Cross, a Republican from Oswego who has been pushing for statewide pension reform. “Even by our standards here in Illinois, it’s beyond belief. It’s insane.”