The history of state government pensions in Illinois is fairly simple. Politicians discover that pension funds are running a deficit. Those same politicians develop a plan to eliminate the deficit, which typically involves Illinois taxpayers putting in more money. Taxpayers pony up the funds. The deficit, somehow, gets worse. In 1994, the five state-run pension...
Illinois government workers are able to retire before the age of 60 while collecting most of their final average salary.
Illinois’ pension conference committee is once again rumored to be nearing a “fix” for the state’s pension mess. But if the pension conference committee is serious about saving the pensions of state retirees and workers who have dedicated their careers to public work, they will put an end to cost-of-living-adjustments, or COLAs, for government retirees...
Illinois legislators and local officials could learn a thing or two from California cities that have buckled under the weight of too much debt. The first is if they don’t implement reforms early enough, bankruptcy for the city of Chicago and other municipalities may be unavoidable. In California, both Stockton and San Bernardino were forced...
Illinois’ current unfunded state government pension liabilities total approximately $200 billion under Moody’s Investors Service’s new methodology. The Illinois Policy Institute estimates that the state’s pension funding ratio is currently less than 25 percent, meaning the state has the worst-funded pension system in the nation. Buried within this massive financial obligation are thousands of current...
Opponents of pension reform try to downplay Illinois’ $100 billion in official pension debt because it’s “not due at one point in time.” They like to compare the pension debt to a “mortgage,” which is paid over 30 years. But this argument is misleading, and here’s why: Illinois isn’t on the hook for just $100...
Chicago’s fiscal crisis just got worse. Last month, the city received a rare triple-notch downgrade from Moody’s Investors Service, to A3 from Aa3. Now, Chicago’s parent government, Cook County, has received a downgrade of its own. Moody’s Investors Service downgraded Cook County’s general obligation bond rating to A1 from Aa3 due to the county’s “growing...
Detroit’s recent bankruptcy is sending cities and states a warning: taxpayers shouldn’t be taken for granted. Unfortunately, Illinois’ long-term pension plan does exactly that. Springfield still believes that taxpayers are passive sources of revenue. While state worker contributions to Illinois’ five pension systems have gone up by 75 percent since 1998, taxpayer contributions have gone...
Suburban Chicago-based NorthShore University HealthSystem announced last month that it will “will freeze its employee pension plan as of Dec. 31 and shift all employees to a defined contribution savings plan.” The NorthShore hospital system isn’t the only private company making this move — Boeing, American Airlinesand Verizon each dropped their defined benefit plans for defined contribution retirement systems. The core...
Illinois has the nation’s worst-funded pensions. Each Illinois household can expect to pay more than $40,000 in additional taxes to cover the pension shortfall if no reforms are passed. The size of the pension crisis demands that state lawmakers pass the boldest reforms in the country. Fortunately, Illinois lawmakers can look to the examples other states have...
The Institute of Government and Public Affairs, or IGPA, a university-based research organization, recently developed a pension plan for Illinois. That plan was presented at a pension conference committee hearing earlier this month. But it’s not the type of reform Illinois’ needs. The IGPA plan fails to solve Illinois’ pension problem. Here are five reasons...
Lawmakers on the Illinois General Assembly’s pension conference committee failed to meet Gov. Pat Quinn’s July 9 deadline to resolve the differences between the various pension reform proposals on the table. At a press conference Wednesday, Quinn announced that he is freezing legislators’ pay until they come up with a comprehensive pension solution. Quinn said he won’t collect...
by Jonathan Ingram The Quinn administration recently released a new projection of how quickly the state’s massive pension debt is growing. As a result, some are celebrating the fact that the governor is predicting that Illinois’ pension debt will only grow by $5 million per day during fiscal year 2014, as opposed to his projection of $17...
by Jane McEnaney On June 27, the Illinois General Assembly’s conference committee on pension reform met for the first time in Chicago. All 10 members of the bipartisan, bicameral committee were present. The committee met for five straight hours, hearing testimony from: Ty Fahner, President, Civic Committee of The Commercial Club of Chicago Jerry Stermer, Acting Director...