Cook County retirees to outnumber active employees in 2 years
Recently released data shows retirees outpacing active employees, adding pressure to an already stressed pension fund.
The Cook County Pension Board appeared before Cook County commissioners Nov. 14 and shared the dire news: As soon as 2019, the Cook County pension fund will have more annuitants than active employees.
This new data point to a problem that continues to grow and will put a massive strain on the county budget. In the last year, the employer contributions to the Cook County pension fund (taxpayers’ share) has jumped from $190 million in 2015 to over $467 million, a more than 145 percent increase.
That massive inflow of cash brought about a mere 1 percent increase in the funding ratio.
Cook County’s predicament underscores the fact that politicians shouldn’t be in the retirement business, and that the fundamentally flawed pension system cannot be bailed out on the backs of taxpayers.
Due to poor fiscal management, growing payroll and generous benefits, all parties are heading toward impending disaster. This is unfair to the workers who were given promises that could never be fully delivered. And it’s unfair to taxpayers who are expected to make up the difference as their own incomes stagnate.
Cook County taxpayers struggle with the one of the highest overall tax burdens in the country, including some of the highest property and sales taxes in the nation. Cook County board members should take the initiative in exercising fiscal restraint and cutting the cost of government.
One solution is sitting right under their noses – 401(k)-style retirement plans for new county workers. A standalone 401(k)-style retirement plan for state university workers has been operating successfully in Illinois for nearly two decades, with more than 20,000 members.
If such a system had been implemented earlier, Cook County retirees outnumbering active workers would not be a threat to the solvency of worker retirements.
Until Cook County Board President Toni Preckwinkle gets serious about addressing payroll growth and introducing real pension reform, she should not shirk responsibility for the county’s budget woes.