Retiring as early as age 50, Springfield municipal pensioners bank over $1M

Among the 23 former city of Springfield employees who retired at age 50, five have accumulated more than $1 million in pension benefits.

For many former local government employees enrolled in the Illinois Municipal Retirement Fund, or IMRF, early retirement isn’t unusual.

But for five former city of Springfield employees who retired at just 50 years old, that has also meant more than $1 million in total pension benefits.

In the last 20 years, 23 former Springfield employees retired at 50 years old, according to IMRF records. The five retirees who have since become pension millionaires each receive current annual payouts larger than the total amount they contributed to IMRF over the course of their careers.

These retirees are only a handful of former city of Springfield employees who have benefitted from overgenerous pension benefits. The city has 1,155 retired employees enrolled in IMRF. Among them, eight collect annual pension payouts greater than $100,000, and more than 50 have collected at least $1 million in total retirement benefits over the course of their retirements, according to IMRF records.

It’s not the fault of local government retirees that this system is unaffordable for taxpayers. State lawmakers set the rules. But rising property tax bills driven by growing pension costs are crushing Springfield homeowners. While many municipal retirees benefit from overpromised pensions, Springfield taxpayers are stuck with the bill.

According to property data company ATTOM Data Solutions, residents of Sangamon County – where Springfield is located – paid an average effective property tax rate of 2.3 percent in 2017. That’s nearly double the national average. For the typical Springfield homeowner, those property tax dollars flow to 10 different units of local government, with the city being the second-largest recipient. More than 11 percent of that homeowner’s property tax bill went to the city in 2017, with 100 percent of those funds going to pensions.

It’s a growing problem: Property taxes in Sangamon County have increased by $446 per person over the last 20 years, adjusted for inflation, outgrowing home values by 49 percent.

If the city’s high pension costs aren’t reined in, Springfield homeowners can expect not only to see their property taxes continue to increase, but more of those bills dedicated to pensions rather than government services as well.

This system is not sustainable. For the benefit of taxpayers and government workers alike, lawmakers should immediately implement 401(k)-style retirement plans for all new government workers. This would provide relief to overburdened taxpayers and a more promising future for government employees. In the long term, however, state lawmakers must amend the Illinois Constitution to allow adjustments to future, unearned benefits for government workers.