The question came in the middle of the Illinois gubernatorial debate tonight between Republican Gov. Bruce Rauner, Democratic challenger J.B. Pritzker, Libertarian candidate Kash Jackson and Conservative candidate Sam McCann. What will you do on the $129 billion hole in the retirement system for public employees?
First the would-be spoilers:
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.
And from the major party candidates:
.
.
Summarizing the answers:
- Redo the ramp, whatever that is;
- Go to a 401(k) which stops the digging but you’re still in that deep hole;
- Go to the ‘consideration model’, whatever that is;
- Put a ‘little more in earlier’, whatever that means.
Bankruptcy looks more than ever like the default option.
Burypensions Blog 
Posted by Tough Love on September 21, 2018 at 8:05 am
Your #2 is the correct 1-st step, as long as it includes the FUTURE service of all CURRENT employees…… not just new workers or those with less than 5 years of service (as has been proposed for NJ)
That’s what NJ desperately needs to do for ALL of it’s Public Sector pension Plans.
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Another desperately needed 1-st step is a massive change in retiree healthcare, wherein the benefit levels are made materially less generous (in coverage, coinsurance/copays, out of pocket maximums, and deductibles) and with all retirees paying at least 50% of the Plan’s total cost (noting that Private Sector taxpayers rarely get ANY (yes any) employer subsidy towards retiree healthcare costs today.
Posted by Seesaw Junior on September 21, 2018 at 1:11 pm
“Bankruptcy looks more than ever like the default option.”
The pension quagmire is light years PAST the “Bankruptcy Option”. There will be a BK, either judicial(orderly through the Courts) or cash flow (unable to pay pensions). Leaving only TWO (2) questions:
1) WHEN? It is clear there is NO solution outside of cutting the “promised” pension benefits to some degree. That day will be when the Muni/State can no longer pay all pensions in full, which will be the next downturn. When will the next downturn arrive? I have no idea as we are three (3) years PAST the time it should have arrived using historical standards.
2) HOW MUCH CUT? What degree? IMO, by however much the pensions are upside down. 30% funded,70% cuts. An exception I would make is I would put a FLOOR (of say $25K/year) in which NO fully vested, full career pensioner could drop below. But ALL of the $75K+ pension need haircuts, BIG HAIRCUTS. Especially the pensions that allowed “Early Retirement”. Early Retirement is any time before age 67, if you retired in your 50’s (I pray they do not allow pensioners to retire in their 40’s) you are taking an exponential slice of the pension fund and deserve a hefty cut.
Pensions were designed to assure our country’s citizens that they would NOT LIVE IN POVERTY IN OLD AGE. Old age is age 65 and above. “Pensions” were never meant to allow government employee’s to live a 1%er “Lifestyle’s of the Rich and Famous” at age 50-60. And that ONLY happens with for government employees. This nonsense has NEVER happened in the real world, the private sector. Pensions of this magnitude (even 1/3 this magnitude) would BK any private sector company in a nanosecond. They would not be able to compete in a free market economy. The ONLY reason this is happening in government is because government does not operate in a real life world. The free market.They operate in the Fantasyland of Government Employment: fraud, corruption backroom deals and self-dealing. It is inherent dishonesty that is destroying, as in wiping out, the poor and middle through regressive taxes (sales tax, gas tax, vehicle registration fees), which are raised through the stratosphere to pay the costs. Tax the MANY for the benefit of the few/small government workforce to fund 1%er lifestyles.
Posted by Anonymous on September 21, 2018 at 1:54 pm
Great comment. Nobody in the private sector has pensions this generous because the shareholders wouldn’t tolerate it. Nobody has stood up for the state’s stakeholders, which are Illinois taxpayers, present and future.
Posted by Tough Love on September 21, 2018 at 4:00 pm
Wow ……………. your best comment to date.
Posted by geo8rge on September 21, 2018 at 1:31 pm
The Consideration Model for public pension negotiations.
First advocated in 2012 by Illinois Senate President John Cullerton, D-Chicago, any changes to the Illinois Pension Code reducing benefits and based on “consideration” would essentially be a consensual agreement between state government and the members of the public pension systems. Under this theory, both sides would have to receive something and both would give up something. In 2017, Gov. Rauner endorsed the “consideration” framework developed by Senate President Cullerton.
https://www.trsil.org/news-and-events/pension-issues/consideration
The ramp was slowly increasing pension contributions until the pension is fully funded.
If any are wondering J.B. Pritzker is one of the, famous for being multi generationally wealthy, ‘Pritzkers’.
Of property tax interest Pritzker, demonstrating how multi-generational wealth stays that way, converted his massive mansion to a minor mansion by disconnecting many of the many toilets. If you are ever a guest of Mr Pritzker you might want to make a mental note of which are the usable toilets.
“With the plunging value came a plunging tax bill and a series of refunds on taxes Pritzker already had paid. What would have been a $117,087 tax bill on Mansion Two last year instead plummeted to $19,719 — an 83 percent discount. Total up all the savings on Mansion Two alone and you approach a tidy $230,000.”
http://www.chicagotribune.com/news/opinion/editorials/ct-pritzker-taxes-madigan-rauner-berrios-edit-0524-20170524-story.html
Posted by Illinois Comptroller Pension Debate – at a Table | Burypensions Blog on September 21, 2018 at 2:44 pm
[…] « Illinois Pension Debate – Not Even a Table […]
Posted by Coco on September 21, 2018 at 7:41 pm
I’m 49 years old in PFRS and make $102,000 per year. I could retire now,but why would I ? I have a desk job now max out my deferred comp and pay $10,000 for health care. In addition my wife makes close to that and is in PERS. There isn’t any reason to leave. If I leave the deferred comp spigot is shut off. I have 5 weeks vacation and over 100 sick days. Quite frankly I’m living the American dream that we all heard about growing up. Why leave.
Posted by Tough Love on September 21, 2018 at 7:56 pm
Yes, you shouldn’t “leave” …………. because you will likely NEED the accumulation from your deferred comp when your pension assuredly gets VERY materially reduced.
The math ALWAYS governs in the end-game, and there will NEVER be anywhere near the funds necessary to pay all that has been “promised” to you.
Posted by Coco on September 22, 2018 at 4:54 pm
Why would I leave and take 65% of my income when I can stay and get 100% of my income ? In addition when the recession hits next year when the majority of the private sector is begging for unemployment extensions I’ll still be on auto-pilot. God I love this country.
Posted by Anonymous on September 21, 2018 at 9:28 pm
Do you even believe someone would post such a comment?
Posted by Anonymous on September 22, 2018 at 12:53 am
Do we smell a ringer?
Posted by Anonymous on September 22, 2018 at 2:42 pm
Road Kill!
Posted by Coco on September 22, 2018 at 4:57 pm
I’m agreeing with you. The pension system is in trouble,I make six figures and I will just stay on the job. Problem solved. You guys scared me into staying. The job is like part-time anyway with all the time off.
Posted by Anonymous on September 22, 2018 at 6:44 pm
Do you have a mandatory retirement age?
For New Jersey State Police, it’s 55.
Posted by Coco on September 22, 2018 at 7:30 pm
No. I may stay till I’m 70.
Posted by Anonymous on September 23, 2018 at 1:35 am
Either way, good luck. I hope it works out well for you.
Posted by Seesaw Junior on September 24, 2018 at 12:33 am
Quite frankly I’m living the American dream that we all heard about growing up. Why leave.
‘LOL! I love this Joker! The fact is the MAJORITY of the public sector employees DO have this same “Entitlement Mentality” though. And the sad part is they DO believe it! I come close to dying from laughter every time 🙂 You’re not living the “American Dream”, you’re living the “American Fraud”. But like TL said, the bottom line is the math. The math always wins in the end. The bigger the pension, at the younger ages, will be the first to get hair cuts, and the biggest haircuts.
Posted by Stanley on September 24, 2018 at 8:22 am
“The math always wins in the end.”
True, but unfortunately everyone will crash and burn together. Hopefully I am incorrect on this, but I don’t see any changes coming that would be substantial enough to keep the big failure from happening.
Posted by Tough Love on September 24, 2018 at 8:50 pm
Neither do I ……….. UNTIL the “burn” begins.
Posted by Coco on September 24, 2018 at 10:22 am
Obviously you didn’t read the part where I said I wasn’t retiring. Explain how I’m going to get a haircut if I’m not going to retire ? Why leave a job that pays over $100,000 when I can take off whenever I want ? In that situation why would I ever take 65% of my pay when I can keep 100%. Use that little noggin junior !
Posted by Coco on September 24, 2018 at 12:52 pm
Between my salary,my wife’s salary and income from another source we have we are over $220,000 per year with no debt at all. That puts us in the top 5% of household earnings in the country. I’m not even getting into what we have saved,but with two maxed out deferred comps for the last 25 years you do the math spanky ! I love this country.
Posted by Stanley on September 24, 2018 at 3:31 pm
Pride goeth before destruction and the haughty spirit before a fall. Haughty spirit, you know, scornfully arrogant. You’re sounding like this foolishness can go on more or less indefinitely, good luck on that one bro.
Posted by Coco on September 24, 2018 at 5:49 pm
How would my job end ? I’m not going to get fired as I have excellent reviews, I’m not going to get layed off as I have seniority. Reality.
Posted by Coco on September 24, 2018 at 5:53 pm
A word to the wise Stanley. You should worry about your own future as a recession is coming and my job is more than secure. Chances are you and yours will be begging in the bread line with your hand out. Reality.
Posted by Stanley on September 24, 2018 at 8:06 pm
“You should worry about your own future as a recession is coming and my job is more than secure. Chances are you and yours will be begging in the bread line with your hand out. Reality.”
I don’t think so. If I ever say ouch, the multitudes will be weeping and gnashing of teeth.
Your job won’t end, probably. Social conditions can change drastically in a very short period of time.
Anyway, why are you only making $100K when Guapo Uno was up well over $200K for just leaning on a shovel much of the time. Regardless, if people do try to stay on into old age, you can count on mandatory retirement laws. I’ve heard of 90 year old postal employees, but no 90 year old badge boys.