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Summary and audio linked here.
Chicago’s political leadership is floating a pension buyout program as evidence it is seriously addressing the city’s thirty-six-billion-dollar unfunded pension liability, but Mark Glennon, founder of the Illinois policy research organization Wirepoints, said that the proposal moves debt from one column to another rather than reducing it, and that the broader fiscal picture facing the city continues to deteriorate across every measurable dimension. Audio here.
Expect no retraction or apology. This what they do.
The state’s existing buyout program for its own pensions is the precedent for Chicago, which should be a warning: Look out for similar exaggerated claims and shoddy analysis.
Full interview and summary linked here.
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With neighboring rep or rep leaning Indiana pensions 89% funded & Wisconsin pensions 100% funded…..but Illinois pensions only 47%? funded its a good look for jb & Illinois machine to tout dem fiscal management come dem convention time in Chicago next fall
When your benefits are HUGE, there is not enough money in the world to pay for the annuity needed. It had skull and cross bones on it from day one.
Illinois has some of the highest taxes and still not enough money to pay for the overly generous pensions.
That’s simply not true. If we hadn’t borrowed for all these years and were not in so much debt from not making actuarial payments, the state would be paying much less into pension funds today. Instead of the 15 billion in actuarial contributions it would be closer to 3 to 4 billion per year, about 6 to 8 % of the budget. Pay more now towards pensions or pay even more later. The voters have chosen to pay more later and now it’s getting really expensive. That’s what they wanted unlike the pensioners that sued to have their pensions actuarially… Read more »
If Illinois could show such financial discipline
Indiana enacted a balanced budget amendment back in 2018 that included actuarial pension funding. Illinois has no such requirement. Maybe one day Illinois voters will demand it.
Yes, I know this well. Many Illinois police and fire pension funds formerly used actuarial tables that were woefully out of date, understating the life expectancy of participants so the plans could be systematically underfunded.
If using outdated actuarial tables was the only issue, Illinois wouldn’t be so deep in debt. Currently the state is paying around 10 billion per year when the actuarial required amounts would be around 15 billion. It doesn’t really matter which tables they use when they knowingly decide to borrow $5 billion per year anyway.
Indiana avg teacher pension = $18k
Illinois avg teacher pension = $55k
Teacherpensions.org
Indiana is not funding anywhere near the benefits that Illinois foolishly promised. That is where the financial discipline comes in.
Indiana teachers also pay into social security. Around 15 states (including Illinois) don’t have teachers covered by SS so their pensions are higher in those states. Those states that allow teachers to be covered by SS are required to make those SS payments each and every pay period unlike Illinois that decided to skip making actuarial payments and allow the debt to increase. Fiscal discipline requires putting aside true actuarial costs. A household or government can spend more money than another and still be fiscally responsible. Unfortunately, Illinois decides to spend more money and also be fiscally irresponsible. The voters… Read more »
PPFtard,
Guess you and your fellow Illinois teachers and other public sector unions made a bad choice picking the state of Illinois to guarantee your golden pension and OPEB/medical benefits.
Tired of all your whining about the need to raises taxes on Illinoisans who actually work 12 months a year.
My bank account has an extra $200K in it as I voted with my feet over 20 years ago and left Taxistan.
Da Judge
From a few sources I read, the $55K average Illinois public teacher pension you noted is way low.
No it’s not. It may have risen a bit but that number is fairly close.
https://wirepoints.org/overgenerous-pensions-one-reason-why-illinois-spends-so-much-more-on-k-12-education-than-florida-part-2-wirepoints/#:~:text=To%20summarize%20the%20impact%20of,or%20double%20the%20original%20amount.
This 2021 WP article shows the average starting pension for career Illinois teachers was about $81K in 2018. That would be an average starting pension of about $100K today, considering salary increases and three percent pension increases. The “career Illinois teacher,” as defined in the article, doesn’t include teachers retiring with less than 30 years of service, but even if they were included, that wouldn’t lessen the $100K figure by much.
That’s an average for a specific subset of pensioners. Sure, the averages are higher when you ignore 80% of the other pensioners. Only a very small percentage of pensioners reach max pension payments. I believe the last stats I saw for Illinois teachers was around 13%. So no, the average pension is around 55k per year. When you compare that amount to other states as PP did in the earlier comment, you need to compare similar groups. He didn’t just look at 30+ year pensioners when he compared it to Indiana so not sure why you would think that’s appropriate… Read more »
What’s misleading is to skew the numbers by including “retirees” with a small number of years of service.
No. Comparing a small subset of retirees to all the retirees in Indiana would be misleading.
30+ years of service is not a small subset of retirees. Also, why did you earlier introduce the concept of reaching maximum pension payments? That’s an irrelevant topic. Many IL public teacher pensioners started with pensions of around $100K without maxing out.
They are not the majority. Most pensioners are not in the 30+ category.
I pointed it out because only a small percentage actually get to their maximum amount, such as 35 years for teachers. You’re trying to point out that the average is much higher than PP claimed yet that isn’t the case. The article you site is a subset of the overall pensioners and definitely not the majority.
We can go back and forth for a long time interpreting data, but the real issue at hand is whether it’s equitable and ethical for the IL taxpayers to fund the increasingly large army of IL public retiree $100K+ pensions.
The state is morally and more importantly legally obligated to pay the pensions. People can disagree on this point all they want but it doesn’t change that pensioners will be paid. No need to go back and forth on this issue because it’s already been settled.
Thanks for clearing that up for me. For a minute there I thought it was unethical for IL pols kowtowing to public unions for votes at the expense of the IL taxpayer.
They aren’t kowtowing to unions. Pensioners have a right to be paid regardless of their union affiliation. There is nothing the politicians can do about it. In fact, politicians tried to steal from pensioners 10 years ago and the courts told them 7-0 to pound sand.
You’ve learned the talking points now it’s time for you to actually learn the facts.
“Many IL public teacher pensioners started with pensions of around $100K without maxing out.” Where are you getting this data? Most teachers that get 6 figure pensions maxed out or almost maxed out their pensions. A Teacher (tier 1) that worked from age 25 to 55 with 30 years of service would be eligible for 66% of their last 4 year average. That would mean the teacher would have needed to average $151,515 over the last 4 years with their last year teaching in the 165k range. The math doesn’t support the likelihood that “many” teachers retired with 6 figure… Read more »
Please see my comment above.
All those averages include teachers that worked for a minimum # of years , etc so are kind of meaningless I assume?