“If changes can’t be made, here is what Gov. Bruce Rauner should do: Lay off the entire state workforce, and close the pension system. Work with the General Assembly to open a different retirement plan for newly hired government workers, modeled after the nation’s most popular retirement vehicle: the 401(k). Then offer to rehire state workers under the new retirement plan.”

3 Comments
Newest
Oldest Most Voted
Inline Feedbacks
View all comments
Jim Palermo
5 years ago

The Illinois Policy Institute essay fails to point out that with the adoption of a 401k type plan, the already brittle Illinois pension plans will be further weakened as the contributions from active workers are no longer added to the pension plan and are instead deposited to the workers’ dedicated defined contribution account. This plan is half-baked until it is accompanied by actuarial analysis.

Jim Palermo
5 years ago

Firing all the Illinois state workers and rehiring them into a 401k type plan will not work because the plans’ accumulated deficits alone make them unaffordable and unsustainable. The 401k might well reduce the cost future state contributions and the risk of market volatility, but the current underfunding is too great to overcome. The unions also bear responsibility this mess. The state government made the pension promises but behind the shield of the 1970 Constitutional ammendment, the unions agreed to these promises that had only a remote chance of being fulfilled. Absent the benefit guarantees, would the unions and their… Read more »

mark glennon
5 years ago
Reply to  Jim Palermo

you are right on all points.