Pensions

Oklahoma pension reform: 401(k)-style plans for new state workers

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’s pension reform flop

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...

By Benjamin VanMetre

Illinois owes more than $56 billion for retiree health insurance

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....

By Jonathan Ingram

Saving Chicago: a plan to put workers, not politicians, in control of retirements

Chicago politicians have exploited city-worker pensions for nearly two decades.

By Benjamin VanMetre

Saving Chicago: Pension reform without tax hikes

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...

By John Klingner, Benjamin VanMetre

401(k)s are better than politician-run pensions

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...

What Mayor Emanuel’s pension proposal does and doesn’t do

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...

Madigan’s broken pension promise

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...

Saving Chicago

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...

Chicago pension funds have $0.36 for every $1 needed to pay out future benefits

Moody’s Investors Service recently cut the city of Chicago’s credit rating to Baa1 from A3, citing pension debt as a key factor in the downgrade. Chicago’s now has the lowest credit rating of all the major cities in the U.S., with the exception of Detroit. Moody’s saw something that’s being ignored by Illinois lawmakers –...

By Benjamin VanMetre

Congrats, Illinois! Your pension shortfall is a $100 billion

The unfunded liability for Illinois’ five state-run pension systems has officially passed the $100 billion mark, hitting $100.5 billion. Source: Commission on Government Forecasting and Accountability

Springfield’s property tax levy swallowed by local pension costs

The Illinois Policy Institute recently published a study titled “The crisis hits home: Illinois’ local pension problem.” The audit measured 10 different metrics related to pensions to arrive at a holistic picture of how rising local pension costs are hurting each city’s fiscal health. The city of Springfield performed dismally in the audit. It scored...

Springfield’s pension crisis

The city of Springfield’s local pensions are in crisis. But instead of facing this problem head on, Springfield Mayor Mike Houston is quibbling over what he calls “flaws” in a comprehensive report by the Illinois Policy Institute that measures the fiscal health of Illinois’ 114 largest cities. Our report found that Springfield scored worst among...

Springfield’s police and firefighter pension shortfalls

The city of Springfield owes $216 million in police and firefighter pension debt alone. This 2012 figure is 6.5 times larger than the $33.5 annual payroll for police and firefighters. Just 10 years earlier, the shortfall was two times larger. (A fully funded pension should have no shortfall.) Pension debts are dwarfing the payrolls that...