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...
Opponents of pension reform in Illinois are quick to malign self-managed accounts, such as 401(k)s, as too risky for government workers. They claim that workers are better off with pensions paid for and run by the government, as if that somehow makes them more secure. But there are three key problems with that argument. The...
Chicago Mayor Rahm Emanuel has reportedly struck a pension deal with city employees who are members of the Municipal and Laborers pension funds. The deal only affects half of the city’s workers. Firefighters and policemen, as well as its teachers, park and transit workers, are not included. The deal, which calls for a five-year, $750...
When House Speaker Michael Madigan pitched his Illinois pension bill late last year, he got pushback for promoting legislation that hadn’t been officially scored by an independent actuary. That pushback was fair game. Illinois has the nation’s worst-funded pensions and an unfunded liability of $101.5 billion. With the number of failed pension fixes this state...
Chicago and state politicians have ignored the city’s growing pension crisis for nearly two decades. But with the recent onslaught of credit downgrades, billion-dollar budget deficits and comparisons to Detroit, the city’s problem has become impossible to ignore. Chicago’s slide toward bankruptcy now threatens the city’s status as an economic powerhouse, as well as the...