How we fix it
Wirepoints has a comprehensive pension reform plan to help fix Illinois.
How do we fix Illinois’ pension crisis
while protecting retirement security for state workers?
The details
1. Move all state workers to 401k-style accounts going forward
Workers get to keep all the pension benefits they’ve already earned, but all benefits going forward will go toward individual 401k-style accounts they own and control.
Employees will contribute 8% of their salaries to their 401k-style accounts and the state will contribute another 7% with every paycheck.
2. Suspend automatic 3% raises (COLAs) for most retirees until pensions are fully funded
Currently, state retirees receive a 3% compounded COLA automatically every year.
Going forward, COLAs will be suspended for most retirees until the state pension plans are fully funded. Pensioners with annual benefits of less than $50,000 will still receive a 1% increase each year.
3. Require state retirees to pay their fair share of health insurance costs
Currently, most retired Illinois workers get free health insurance coverage.
Going forward, state retirees will be required to pay a portion of their health insurance premiums depending on their income, retirement age and years of service.
The good news:
There’s no need to reinvent the wheel
A 401k-style plan like the one described above has existed for Illinois university workers for more than 20 years.
More than 20,000 university workers have opted out of pensions and into those 401k-style accounts, which offer more flexibility, portability and individual control.
All we need to do is extend that same plan to all state workers.
Wirepoints’ pension solution
First step: A constitutional amendment
The Illinois Constitution’s pension protection clause currently blocks any real reforms. But just 50 words, added to the constitution, can make Wirepoints’ reform plan a reality:
“Nothing in this Constitution or in any law shall be construed to limit the power of the General Assembly to reduce or change pension benefits or other benefits of membership in any public pension or public retirement system, whether now or in the future, accrued or yet to be earned.”
That amendment language would grant Illinois lawmakers the broad powers to reform pensions at every level of government.
Opponents of reform say any changes will be struck down at the federal level. But that’s not true. Wirepoints has assembled the legal case for reforms. In short, federal law isn’t an obstacle if reforms are “reasonable and necessary.” The proof is in the successful reform experiences of states like Arizona and Rhode Island.
Bring Illinois back
Fixing pensions can rejuvenate Illinois by helping…
Bring an end to the state’s pension crisis.
Create budgets that focus on core services instead of old debts.
Create a financially stable state government.
Create an environment where businesses can better compete.
Reduce the debt each household is on the hook for.
Protect state workers’ already-earned benefits.
Stop lawmakers from always raising taxes.
Empower state workers with control over their own retirement accounts.
Bring an end to the state’s pension crisis.
Create a financially stable state government.
Reduce the debt each household is on the hook for.
Stop lawmakers from always raising taxes.
Create budgets that focus on core services instead of old debts.
Create budgets that focus on core services instead of old debts.
Protect state workers’ already-earned benefits.
Empower state workers with control over their own retirement accounts.
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
For a deep dive into the details, read Wirepoints’ comprehensive plan: Solving Illinois’ Pension Problem: Why It’s Legal, Why It’s Necessary, and What It Looks Like.
Take Action
Join us in championing a pension solution for Illinois