Illinois has once again earned the dubious honor of having one of the worst pension crises in the nation. This week, the Competitive Enterprise Institute, or CEI, released a report, “Understanding Public Pension Debt,” which combined the state rankings of several different pension debt studies, including reports by Moody’s Investors Service and the U.S. Census...
The California city of Stockton’s bankruptcy case took an interesting turn yesterday. The big question surrounding the city’s bankruptcy has always been what might happen to city employee pensions. Most government advocates assumed that these pensions would remain untouched no matter what happened to Stockton’s finances. Now the federal judge in charge of the bankruptcy...
The recent Illinois Supreme Court ruling on state retiree health insurance benefits creates a major problem for both the state and local governments. The court ruled that retiree health insurance benefits are protected by the pension protection clause of the Illinois Constitution. The ruling will make it difficult to reform retiree health benefits and to...
A convicted torturer is still receiving an Illinois state pension. On July 3, the Illinois Supreme Court ruled in favor of a decision by Chicago’s police pension board allowing disgraced former Chicago police Cmdr. Jon Burge to continue receiving his approximately $3,000 per month pension. That’s despite the fact that Burge is currently serving a...
Opponents of real pension reform often argue that government workers receive modest pensions. The Chicago Teacher’s Union, or CTU, is one such opponent. Under its FAQ page about teacher pensions, the union’s website states: “The average Chicago Teachers’ Pension Fund (CTPF) retiree earns $42,000 per year. Of the 87,000 retired teachers in Illinois, almost 1...
The problem Chicago is suffering from one of the worst pension crises in the nation. To begin fixing its failing system, the city should move away from a politician-controlled, defined-benefit system. But another important step is reforming retirement-age requirements. The Chicago systems’ retirement ages don’t reflect today’s fiscal and demographic realities. People are living longer,...
Illinois’ lawmakers often blame unions for the Illinois General Assembly’s inability to pass real pension reform. “The unions will never allow it” is the common chorus when it comes to proposing bold reforms like those recently passed in Oklahoma, which put nearly all new state workers on 401(k)-style plans, or those passed in many other...
State workers, retirees and public-sector unions groups have filed various lawsuits challenging the constitutionality of Senate Bill 1, the state pension reform bill signed into law by Gov. Pat Quinn in December 2013. The top pensioner of those suing the state will receive $2.4 million in pension benefits over the course of his retirement. That...
Politicians are celebrating their pension “fix” for the city of Chicago. But their plan is nothing more than a massive property tax hike – it increases city contributions by $4 billion through 2025. More importantly, it doesn’t solve the pension problem. Mayor Rahm Emanuel’s pension plan does nothing to improve the retirement security of city...
In a step toward meaningful pension reform, Oklahoma Gov. Mary Fallin signed legislation that ends the state’s traditional pension retirement system for newly hired state employees in favor of a 401(k)-style retirement plan. Teachers and state workers designated “hazardous duty” including firefighters and law enforcement officers are exempt. And the legislation does not change the...
Cook County Board President Toni Preckwinkle struck a pension deal for county employees earlier this month. The plan recently materialized into legislation that quickly moved through the Illinois Senate, but has not passed in the Illinois House. Preckwinkle’s plan fails to fundamentally reform pensions and may result in massive tax and fee increases, a reduction...
The problem At the end of fiscal year 2013, Illinois had accumulated more than $100 billion in state pension debt. Although the General Assembly enacted Senate Bill 1 in December 2013, the bill will – at best – reduce the unfunded liability to $80 billion, roughly where it was during the pension crisis in 2011....
Chicago politicians have exploited city-worker pensions for nearly two decades.
Chicago politicians have exploited city-worker pensions for nearly two decades. They’ve used the city’s pension systems as slush funds and pension benefits as bargaining chips to further their own agenda, with seemingly no regard for Chicago’s fiscal health. Now those pension systems are nearly insolvent and the city is heading toward bankruptcy. Chicago is facing...