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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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“As I’ve said before, to various outlets, maybe even this one, our pension system is a Social Security replacement plan. It is in place to replace Social Security, so those that get a state pension do not receive Social Security. And so there are certain thresholds that we have to maintain federally for it to continue to be a Social Security replacement plan,” state Rep. Stephanie Kifowit said.
I have an easy solution. Just use SS and do away with pensions. Therefore no need for a replacement plan.
The problem with that is the State then would have to fund the program as the liability came due. Certainly you wouldn’t expect the legislature et al to give up the vote buying pool of funding for goodies would you?
Like Tier 1 retirees, do Tier 2 retirees pay no health insurance premiums, too? If so, that should be factored into a comparison to private-sector retirees of overall retirement benefits.
Not all tier 1 retirees get health insurance with no premiums including TRS members. SERS and SURS, both tiers, are eligible with enough service credit for premium free healthcare. Police and Fire varies I believe.
The huge expense for the state is the period between retirement and when Medicare kicks in. That’s covered by the state for all pensioners and where the big buck are spent.
I agree the expensive period is as you stated however not all pensioners receive “premium-free” as myql has written. TRS pensioners pay $370 per month for an HMO insurance plan and $857 for a choice plan. Yes the state is still paying a portion but it’s definitely not “premium-free”.