Private and public sectors trade pension plans for real retirement security
Private and public sectors trade pension plans for real retirement security
Over the last three decades, private-sector companies have transitioned away from traditional pension plans and toward 401(k)-style plans for their employees. While the traditional pension plans were unpredictable and unmanageable, these 401(k)-style plans offered companies a greater level of certainty in their budget and gave employees greater control over their retirement accounts. Today, 85 percent...
401(k)-style retirement plans are the new normal; Illinois should get on board
401(k)-style retirement plans are the new normal; Illinois should get on board
401(k)-style retirement plans have become America’s primary retirement vehicle. In 1985, only one in 10 Fortune 100 companies offered 401(k)-style retirement plans to their employees. Today, seven in 10 Fortune 100 companies provide only defined-contribution, 401(k)-style retirement plans to new employees. This trend is in line with the private sector overall, where nearly 85 percent of...
By Benjamin VanMetre
Another state credit downgrade highlights need for pension reform
Another state credit downgrade highlights need for pension reform
Pennsylvania is the latest state to receive a Moody’s Investors Service credit downgrade. The drop was largely due to the state’s growing pension crisis. Moody’s issued the following statement with its credit downgrade of Pennsylvania to Aa3 from Aa2: “The downgrade of the general obligation rating to Aa3 reflects the commonwealth’s growing structural imbalance …...
Detroit’s city pensioners vote to cut their own pensions
Detroit’s city pensioners vote to cut their own pensions
It’s ironic that Detroit government workers and pensioners, on the one-year anniversary of the Motor City’s bankruptcy, have voted to cut their own pensions. Their vote is part of a “grand bargain” bankruptcy restructuring that seeks private, philanthropic and state funds to help avoid massive cuts in government pensions. The bargain reduces Detroit’s debt by...
Millennials reject broken, traditional retirement benefits
Millennials reject broken, traditional retirement benefits
Most millennials don’t trust Social Security, according to a spring 2014 survey from Reason-Rupe: The report found that: “Fifty-three percent of millennials say Social Security is ‘unlikely’ to exist when they are 67 years old, while 45 percent say it probably will remain. But if it does exist at that time, even fewer millennials believe...
Flint offers grim look at the future of Illinois’ pension crisis
Flint offers grim look at the future of Illinois’ pension crisis
Illinois isn’t the only place where retiree health insurance costs are destroying state and local budgets. For the latest example of where the Land of Lincoln could be heading, look no further than Flint, Michigan. Unless the city of Flint enacts reform, retiree pension and health expenses will consume $0.32 of every $1 in Flint’s...
By Benjamin VanMetre
Elgin taxpayers contribute almost 3 times more to pensions than city employees
Elgin taxpayers contribute almost 3 times more to pensions than city employees
Local pension crises are severely affecting cities, towns and villages across Illinois. Even local governments that have a good track record with transparency and high credit scores are struggling to pay for pensions. Take the AAA-rated city of Elgin, for example. To get its pension system’s funding level up to par, the city would have...
By Benjamin VanMetre
Real pension reform includes a reality check for retiree health benefits
Real pension reform includes a reality check for retiree health benefits
Illinois’ budget battle took a turn for the worse earlier this month. A decision by the Illinois Supreme Court put the state and its taxpayers at risk. The Supreme Court ruled that Illinois has its hands tied when it comes to reforming retiree health insurance benefits for government workers. The problem is that Illinois has...
By Benjamin VanMetre
Illinois pension debt ranks second-worst in the nation
Illinois pension debt ranks second-worst in the nation
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...
By John Klingner
Stockton bankruptcy: Federal judge hints that pensions ‘can be adjusted’
Stockton bankruptcy: Federal judge hints that pensions ‘can be adjusted’
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...
By John Klingner
Real, reasonable pension reform: 401(k)-style plans for new state workers
Real, reasonable pension reform: 401(k)-style plans for new state workers
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...
By John Klingner
Convicted felon and torturer will continue to receive pension
Convicted felon and torturer will continue to receive pension
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...
By Austin Berg