In this week’s Elon Law Now faculty commentary series, Elon Law Dean Luke Bierman supports a landmark ruling on pension protection by the Illinois Supreme Court and calls for creative thinking on a national scale to ensure fair and effective state budget solutions.
“The Illinois Supreme Court recently struck down legislation intended to put the state’s finances back on track by making significant changes to the state and local pension obligations. Rooted in state constitutional guarantees to pensioners, this decision is noteworthy for its protection of pension rights over state budget requirements. Considering the recent vilification of public employees like police, firefighters, teachers, and sanitation workers for the woes of the public fisc, it is reassuring to see an important state court recognize the obligations of government to fulfill its commitments to its workers.
“The failure of lawmakers in Illinois to make good on the state’s pension obligations over the years is reflected in its 2013 settlement with the SEC for civil fraud regarding misleading pension obligation disclosures in the issuance of bonds. And the complicity of the financial industry for exacerbating this situation is reflected in the US Department of Justice settlements with JP Morgan Chase, Citigroup and Bank of America in which Illinois participated but received at best only pennies on the dollar for the losses suffered by its taxpayers who have had to pay increased contributions to the pension funds for years to make up those losses.
“It is well past time for more creative thinking and broader solutions that do not land on the backs of those who worked hard to build their communities with expectations about a compensation package that included constitutionally enshrined pension benefits. The challenges associated with solving the serious financial problems affecting the Land of Lincoln are the canary in the coal mine and require leadership on a national scale to ensure necessary creativity, fairness and effectiveness.”
As general counsel in the Office of the New York State Comptroller from 2007 to 2010, Luke Bierman was responsible for all issues regarding the constitutional, statutory and administrative responsibilities of the New York State Comptroller, who is one of four state-wide elected officials, the state’s chief fiscal officer and sole trustee of the state’s pension fund. Bierman managed an 85-person legal services staff, including 55 lawyers, plus 25 retained outside law firms for securities litigation and transactional matters. Bierman oversaw a full range of legal issues affecting investment of a $130 billion state pension fund and oversight of a $130 billion state budget. In addition, Bierman was responsible for the Comptroller’s initiatives in ethics and law and policy. During his time with the Comptroller’s office, Bierman served on the board of directors of the Council of Institutional Investors where he co-chaired the board’s policy committee.
“Elon Law Now” is a weekly series of commentary and analysis by members of the faculty at Elon Law.