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Six years into retirement, Ron Guenther’s annual pension is more than $470,000 and is set to rise even higher, thanks to 3 percent yearly increases.
Illinois universities are blaming the recent budget impasse for their declining enrollment and financial problems. But the problems in higher education started long before the budget fight, and are largely self-inflicted.
State Sen. Dale Righter, R-Mattoon, has proposed a plan that would give all state workers access to retirement plans that offer portability and flexibility – and an escape from Illinois’ broken pension system.
Nearly 38 percent of Illinois Teachers Retirement System assets are in so-called alternative investments.
Since 1998, more than 20,000 state university workers have opted into a 401(k)-style plan instead of the traditional pension plan.
In 2010, the unfunded debt related to pensions and retiree health care costs for local and state government workers across Illinois was $203 billion, the equivalent of more than $43,000 per household. In just six years, the total debt Illinois households are on the hook for has jumped to $56,000, or 31 percent. That’s a $13,000 increase for each household. Total unfunded debt for state and local governments in Illinois now totals $267 billion.
More than 50 percent of the state’s $4.1 billion budget for public universities is spent on retirement costs alone.
Illinois households are now on the hook for $27,000, up 17 percent from 2015.
Illinois’ public colleges and universities used to be affordable, but schools have increased tuition from 74-112 percent over the last decade to help pay for administrative hiring sprees and skyrocketing pensions.
Here's what you need to know about Illinois' $111 billion state pension crisis.