Pigs and Paupers, Pensions and Parity


August 25, 2013


If, in blinding contrast to reality, Illinois wanted to reform pensions fairly it would first have to define and tally up what might be called “the really-must-pay” priority pension claims.  That means pensions truly needed by certain retirees — pensions in reasonable amounts that start at a true retirement age — not the scandalous ones we read about so often for people still working, spikers and double dippers, or pensions that are simply excessive. Illinois hasn’t bothered to do that and it probably won’t.


Even my fellow ruthless pension hawks would all agree, I’m quite sure, that some pensions need to be protected.  Workers who spent their entire careers in government jobs who retire with a pension of 30 or 40 thousand dollars a year (and perhaps others; debate the definition later) shouldn’t face the axe. With no Social Security, it’s the pension or destitution for some of them.


But how many such pensions are there and what would it cost to assure they are funded?  Nobody knows. No studies, no nothing. Running the numbers would be tricky but feasible. Simply picking out some maximum pension number and prioritizing everything under it won’t work.  A pensions may be small because the worker was part time or spent some of his career elsewhere with separate retirement benefits.


Despite those complications, surely some attempt to categorize pensions based on need would be in order if we wanted to be fair about this, and here’s why: Pension reform legislation will almost surely include the “guaranty” provisions demanded by the unions that will automatically force cash appropriations into the pension funds, available to fund all pensions. In other words, unions are demanding equal protection for all — pension parity for pigs and paupers.


Legislators are happy to oblige because some of them and their contributors are, well, pigs themselves.  If lawmakers wanted to guaranty a special level of protection for just the needy little guys they could easily craft that provision. Not happening. Admittedly, some reform proposals to cut COLA increases have exempted  smaller pensions.  That’s nice, but hardly sufficient to achieve true fairness.


It’s those little guys who have every right to scream about fairness, not the fifty something year-olds getting million dollar value pensions doing most of the bitching. And those little guys should be scared. As each day passes the large, eventual and unavoidable cuts to pensions grow still larger.  Big cuts made quickly would contain the problem. Do that now and payments to the needy perhaps could be assured.  Make cosmetic cuts, and try to guaranty funding for all pensions (which is doomed to eventual failure), and the little guys are in real jeopardy.   That’s just where the pension “reform” committee recently told us we are heading.


Mark Glennon



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I don’t hear anyone complaining about their 401K pensions. When the private sector was getting big contributions into their private pension plans the public sector employees were told, you’re public employees, you don’t get a piece of that. You make it sound like all of you will be living off of Social Security, we all know that’s not true. They can try and make any changes they want to Illinois pensions, they will lose in court, if you don’t believe me just look at Arizona. What they should do is take money from other parts of the State budget and… Read more »


The last two 401k plans I was in were terrible. The fees would take most of the gains and if you made 2% that was good. Employer match is only good if you are vested, usually 5 years. I quit the 401ks and went to IRAs. But then you are at the mercy of the stock market. I am not on SS but that is what mine will pay out n a few years. And there are a lot of people who’s only income is SS. My Illinois property taxes will eat up nearly a 1/3 of my SS alone… Read more »


$30-40K pension on a 9% contribution rate? My SS with my 7% and my employers 7% is around $15k a year.

Mark Glennon

RedRasberry- Good point. And with evermore workers being self-employed, they frequently have to pay both halfs of the the SS contribution.