Illinois

Illinois Starts Nibbling at the Edge of Pension Reform

Solutions a far cry from dealing with issues of sustainability

|

A couple of weeks ago, Illinois Gov Pat Quinn's office introduced a Disneyesque cartoon snake to explain to constituents to the state's extreme public pension problems and to encourage them to yell at the state legislature to fix it all somehow. (Without suggesting anything in particular)

Last week, that "somehow" was introduced with a bill to make some changes to the state's pension program. The (Springfield, Ill.) State Journal-Register detailed some of the basics:

State employees, teachers, university employees and legislators would pay more for their pensions, receive reduced cost-of-living increases in retirement and retire later under a plan to be introduced Wednesday by a group of House Democrats.

The reduced COLAs also would apply to already retired state employees.

But the plan also creates protections aimed at ensuring that state government meets its pension funding obligations in the future, including allowing court action and the "intercept of other state funds," according to a summary of the proposal obtained by The State Journal-Register. Underfunding by the state is the main culprit in the state's $96 billion in pension debt.

There is a bit of resentment by Illinois unions for being treated like the bad guys, given that the state is responsible for not paying its side of the pension debt. Part of the union-flavored responses I tend to see on these pension reform proposals is an inability to get past the cause to the solutions. Why should they be punished because the state didn't pay its share?

Beyond the likelihood that current public sector employees most likely benefited with above-average salaries for the state's failure to squirrel away money, the response is notable for insisting that the damage had been done just shouldn't have been done. I am reminded of a Kids in the Hall sketch of a restaurant customer upset because the waiter took too long to bring him a check. When the waiter attempts to correct the oversight, he cannot: the customer will not be satisfied unless the check is brought when he asked for it … in the past. Enjoy Canadian comics in wigs and drag (and Dave Foley and Bruce McCulloch having competing psychotic breaks):

Elsewhere, the Illinois Policy Institute explains how the proposal to fix Illinois pensions falls short by sticking with defined benefits rather than shifting to defined contributions (even a new plan for educators is a hybrid approach of defined benefits with additional potential payouts depending on fund performance).

NEXT: Cameron Joins Obama, Rejects Drug Decriminalization Despite Empirical Evidence it Works

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. In Penna., the GOP controlled government gave away the store back in 2001. Unions and teachers now demand that any reforms going forward should not apply to them, only to new employees entering the state pension system. So far, the current GOP controlled government doesn’t have the balls to change benefits going forward for all employees, new or already on board.

  2. That’s funny, because talk about public debt and pension reform always puts me in mind of another KITH sketch.

    1. I cackled at the reference to “sacred trust,” a phrase I keep reading in defense of not scaling back pensions.

    2. Mother: You want me to give you a quarter so you can masturbate in front of my son?

      Chicken Lady: YEEEAAAAHHH!

      Mother: I’m calling the police.

  3. Quinn’s office introduced a Disneyesque cartoon snake

    “Don’t twead on me!”

    /Elmer Fudd

    1. That skwewy government! You wascals won’t get away with this!

  4. The pubsec unions are at least as annoying and unreasonable as Bruce’s character. Unfortunately, it’ll take more than an apology to make them go away.

  5. If anything gets passed in IL, the unions will immediately fire off a lawsuit, on IL State Constitutional grounds (our 1970 changes were….not so good, overall). I expect this will only be resolved when the state either goes into BK or flings the whole mess into the Pension Guarantee Fund sarlacc.

  6. including allowing court action and the “intercept of other state funds,”

    This allows lawsuits to force MOAR MONEY into the pension, regardless of what the legislature does, and allows money allocated for other programs to be seized by the pensions?

    Pretty sweet deal, all told.

    There is a bit of resentment by Illinois unions for being treated like the bad guys, given that the state is responsible for not paying its side of the pension debt.

    Maybe if these greedy, irresponsible fucks hadn’t done deals with corrupt idiots to create an unsustainable pension plan, they wouldn’t be up against the wall now?

  7. “There is a bit of resentment by Illinois unions for being treated like the bad guys, given that the state is responsible for not paying its side of the pension debt.”

    Yes but what the Union idiots always either fail to realize (or at least admit in the handful of cases with working brain cells) is that the reason the pension contributions were not made is because the levels of taxation required to fund such lavish pension benefits would have been prohibitively high meaning that the pensions would never have been given out at that level had the politicians awarding them had to actually pay for them.

    Lets face it, lavish future benefits are just a way for politicians to buy votes with someone elses money. There is no current cost and by the time the bill comes due the politician has moved on to greener fields.

  8. I work for the state in Illinois, but am not union, nor do I make a particularly good wage after 25 years (particularly compared to a comparable job in the private sector). However, any adjustments to pension, etc. will affect me as well.

    I negotiated in good faith when I took this job, just like I would with a private company, based on a package of salary and benefits.

    If a private company went back on its contractual responsibilities, I think I should have the right to be upset with them, even if they had financial difficulties due to their mismanagement, and want them first to find solutions elsewhere rather than with my compensation.

    Am I also an idiot like the unions are being described here?

    1. Have you been paying attention to the contributions to the pension fund and its rate of return for the last 25 years? If not, then, yes, you are an idiot. If you have and you have been seeing that your pension has been underfunded, why haven’t you been demanding a personal account that can’t be raided?

      Idiot or not, you have the right to be upset and even to demand sympathy. But you don’t have a right to all the money you thought you were going to get because nobody was ever making a good faith efforts to cover your pension. Anyone in the private sector who tried to pay you with fantasy pensions would have gone to prison 24 years ago. You have to accept some of the responsibility for the criminal negligence with which your pension has been funded and managed.

      1. Ah, I didn’t know that employees were responsible for the criminal negligence of their employers. Thanks for clarifying. I’ll turn myself in tomorrow.

        I expect I’ll be spending time in prison with all those bankers and financial folks who broke the law and made the economy collapse.

        1. It’s your responsibility to pick who to trust with your money, and you picked the state of Illinois. Len Cohen picked his manager and got ripped off, so now he has to keep working. I feel bad for him, but I also hope he’s learned his lesson and acts more prudently in the future. I made bad investments with my own IRA, and this means I will have to work longer than I otherwise would have. I accept this is my responsibility to deal with this and I strive to do better. Are you striving to do better? Or are you still trusting Illinois?

  9. State employees are responsible for the mess in part because they tangled their futures up with the state and entrusted their retirement income to the politicians who run it.

    1. Actually, I think you pretty much just described everyone who pays taxes.

Please to post comments

Comments are closed.