Wednesday, December 2, 2020

Illinoisans need pension reform,
not tax hikes

Help spread the message

It doesn’t matter what side of the aisle you’re on, you should be deeply concerned about Illinois. We are the nation’s extreme outlier, with the biggest pension debts and worst population losses in the country.

More tax hikes won’t fix Illinois’ problems. In fact, they’ll make everything worse. The only solution is to reduce Illinois’ overwhelming debt and that can only come through pension reform.

Wirepoints has a comprehensive plan to fix Illinois’ overwhelming pension crisis.

Goals of Restructuring

Reduce the state’s structural liabilities to help Illinois escape its downward spiral of growing debts and a shrinking population.

End the unfair Tier 2 system, where workers hired after 2010 are forced to subsidize the benefits of Tier 1 workers and retirees.

Restore retirement security for state workers and retirees while protecting already-earned benefits to the extent possible.

Improve budget certainty for governments and taxpayers by turning future retirement contributions into known, predictable, fixed costs.

Help reestablish a competitive level of services, tax rates and economic growth for Illinois.

Ensure that reforms are “reasonable and necessary” to comply with the U.S. Constitution’s contracts clause.

Help ensure that Illinois’ most vulnerable citizens no longer suffer from a lack of core services and punitive tax increases.

Ensure that retirements are controlled by workers themselves, not Illinois lawmakers. Workers must receive flexible, portable retirement plans they own and control

A constitutional amendment for pensions will give Illinois the power to enact real change.

Here’s the plan

1. Freeze defined benefit plans going forward – no future pension accruals.

2. Move all existing workers to a defined contribution plan based on Illinois universities’ existing defined contribution plan.

3. Means-test COLAs: Provide a 1% simple benefit for all pensioners receiving less than $50,000. Benefits are frozen for all others until pensions are fully funded.

4. Means-test retiree health insurance subsidies so retirees pay for half of their insurance costs – the nationwide average for government retirees.

  1. Freeze defined benefit plans going forward – no future pension accruals.

  1. Move all existing workers to a defined contribution plan based on Illinois universities’ existing defined contribution plan.

  1. Means-test COLAs: Provide a 1% simple benefit for all pensioners receiving less than $50,000. Benefits are frozen for all others until pensions are fully funded.

  1. Means-test retiree health insurance subsidies so retirees pay for half of their insurance costs – the nationwide average for government retirees.

Illinois’ retirement solution already exists.

In 1998, lawmakers created a retirement plan that offers state university workers an alternative to traditional pensions. Called the Self-Managed Plan, or SMP, these 401(k)-style accounts offer workers more flexibility, portability and individual control than pensions do.

More than 20,000 Illinois state university workers have opted into the SMP plan since its inception.

Wirepoints’ plan simply expands a version of the universities’ SMP to all state workers.

Results of Wirepoints’ baseline plan.

A better Illinois.

Only 60 years ago, Illinois was a destination state for Americans and people across the globe. Illinoisans flourished alongside the state’s economic and manufacturing might, world-class universities, vast farmland, a massive transportation hub and much more.

Illinois can become a destination state again

Wirepoints Commentary in the Chicago Tribune

Wirepoints Editorials in the Chicago Tribune

Wirepoint's Special Report: Solving Illinois' Pension Problem

Wirepoints Special Report: Solving Illinois' Pension Problem

TAKE ACTION

Illinoisans need reforms, not more tax hikes.

Join us in championing a pension solution for Illinois.