Illinoisans pay twice for their legislators
Illinoisans pay twice for their legislators
Illinois’ active legislators will each cost the state budget about $180,000 next year.
Chicago pension debt grows despite high market returns
Chicago pension debt grows despite high market returns
The city of Chicago’s four government-run pension funds each beat their expected investment returns in 2013, according their most recent financial reports. Yet the city’s unfunded pension debt grew by nearly $800 million. The assumed investment return for the city’s four pension funds ranges from 7.5-8 percent. Yet the 2013 investment returns were 13 percent...
Is pension reform dead in Illinois?
Is pension reform dead in Illinois?
In June 2014, in response to attempts by the state to reform government-worker health-care costs, Illinois’ Supreme Court found these benefits to be protected by the state’s pension clause – even though retiree health-care benefits are nowhere to be found in the state pension code. As a result, many assume that if the state can’t...
Record number of Illinois government workers opt out of pensions, into 401(k)-style plans
Record number of Illinois government workers opt out of pensions, into 401(k)-style plans
Illinois has the worst-funded pension systems in the nation. But there’s one group of state-government workers that isn’t worried about whether their retirement checks will be slashed. Today, more than 13 percent of all active employees in the State Universities Retirement System, or SURS, participate in a 401(k)-style plan instead of a traditional pension plan...
By 2029, Illinois will spend more on pensions than education
By 2029, Illinois will spend more on pensions than education
Hardworking Illinois families and entrepreneurs are just four months away from tax relief. The state’s personal income tax rate is slated to drop to 3.75 percent from 5 percent in January 2015. But a number of lawmakers and special-interest groups don’t want to let that happen. Tax-hike advocates across the state argue that Illinois needs...
Arizona firefighters fight for retirement security
Arizona firefighters fight for retirement security
Given they depend on the nation’s worst-funded pension systems for their retirement security, Illinois’ government workers may want to take a look at how a group of Arizona firefighters are responding to pension-fund problems of their own. Arizona’s firefighters fear that out-of-control pension costs could bankrupt cities in Arizona, resulting in cuts to pensions like...
Taxpayers on the hook for risky investments in state pension systems
Taxpayers on the hook for risky investments in state pension systems
Politicians have made a mess of Illinois’ finances, in large part through their mismanagement of state and local pension systems. With most of the state’s pension funds heading toward insolvency, it’s no surprise that politicians’ actions – from using government-worker retirements as slush funds, to trading retirement benefits in exchange for union support, to taking...
Traditional pensions a bad fit for teachers, millennials in Illinois
Traditional pensions a bad fit for teachers, millennials in Illinois
More mobile than any generation before them, millennials need retirement plans, such as 401(k)s, that are just as flexible. But if you’re a millennial looking to become a state-government worker in Illinois, you may want to look elsewhere. Mobility isn’t a priority for state officials. Illinois almost exclusively offers its government workers traditional pension plans....
SEC charges prove politicians shouldn’t control public pensions
SEC charges prove politicians shouldn’t control public pensions
Illinois taxpayers and government workers got proof in 2013 that politicians can’t be trusted to manage public-worker retirements. That’s when the Securities Exchange Commission charged Illinois with securities fraud. Now, Kansas joins Illinois and New Jersey as one of three states to face SEC civil charges for misleading investors about the health of their pension...
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...
Taxpayers on the hook for billions in hidden government-worker health-care costs
Taxpayers on the hook for billions in hidden government-worker health-care costs
The problem Skyrocketing retirement costs for Illinois’ state and local government workers are wreaking havoc on governments’ ability to provide core services such as public safety, education and infrastructure. States and cities across the nation continue to struggle with massive pension and health-care costs, which force residents to pay higher taxes and fees to receive...
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...