Wednesday, Oct 22, 2014
Quincy, IL News - QuincyJournal.com
Trending on the Journal

Related Headlines

Removing The Pension Protection Clause

Moody's: Ill. pension debt vs. revenue is worst

Individual state pension miscalculations can now be legally addressed, fixed

State retiree insurance premiums dropping to pre-July 1 levels

Average Illinois public pension catching up to average salary

Recent Comments

Loverofblues - REBEL MEDIA: So I have a sign in my yard - Quincy, IL News - QuincyJournal.com
35 years for teaching.
cih8920 - Despite record yields for farmers, Titan\'s Taylor sees down year for tires in 2015 - Quincy, IL New
Titan tractor tires have a very poor track record in the last few years and it is evidently starting to show up in Titans pocketbook.
RUHEARINGVOICES - Illinois Early Voting starts: Cook County ballot box tries to cast GOP votes for Democrats - Quincy,
...and in Adams County I was required to show a photo ID to vote early even though the statute was amended effective July 1st to eliminate that requirement for 2014 only. http://www.ilga.gov/legislation/ilcs/fulltext.asp... middle of para (b).
CoolEdge - Despite record yields for farmers, Titan\'s Taylor sees down year for tires in 2015 - Quincy, IL New
370-400 bushels per acre? National average is supposed to be a record at 172, but are they making 370 even in the irrigated bottom ground? We had lotsa rain and a lot of double ears filled out ... but the average is only 10 bushels higher. Of course most of those extra bushels are probably sold at $3, and they are looking at under $3 next year. Most farmers already made a lot of purchases with…
CoolEdge - REBEL MEDIA: So I have a sign in my yard - Quincy, IL News - QuincyJournal.com
Ellington is concrete, doesn't seem "temporary". If the roof is an issue, put some pretty metal gabled roofs over the thing. HVAC is the issue? ... how can it be more for new units than a new building with new HVAC? They could even add a new building behind the old(er) building. The best sales point to me is in attracting industry to the area, which wants to attract individuals, who want good…

Most Popular

Authorities make meth bust on Madison

Adams Co. Divorces for 10/17

Nursing unions call for better Ebola preparedness

School Board to outline plans for savings, old buildings if referendum passes

Despite record yields for farmers, Titan's Taylor sees down year for tires in 2015

Tournear Promoted to JWCC Nursing Admin Chair

QU to Host Science Family Fun Night

Bill Clinton to address workers at pro-Quinn rally

Two new numbers, one point: Illinois can’t afford pensions

Two new numbers, one point: Illinois can’t afford pensions

1 year, 1 month ago by Ben Yount, Illinois Watchdog

State will pay $620 billion in pensions over the next 30 years

SPRINGFIELD — Illinois taxpayers can look at two different numbers that lead to the same conclusion — the state cannot afford its pension payments.

The public policy group State Budget Solutions released a report this week showing Illinois’ pension debt is more than $287 billion, nearly three times the $100 billion debt Illinois lawmakers say they are working to contain.

The Illinois Policy Institute then released its report showing the state will pay $620 billion to retiring state workers over the next 30 years. 

“This $620 billion is the amount that Illinois’ five state-run pension systems will pay out in retirement benefits and cost-of-living adjustments for work already completed by workers and retirees. And the bill starts getting paid next year,” Ted Dabrowksi, the Policy Institute’s vice president, said. “ The pension systems will pay out nearly $9 billion in benefits in 2014. These payouts will increase every year through 2045.”

Dabrowski said Illinois can hardly afford this year’s $9 billion pension payment, and there is no way the state can afford the scheduled $32 billion payment in 2044.

Illinois has, depending on who you believe, anywhere between 40 percent and 24 percent of the money it needs to cover future pension costs.

But those numbers are not set; Illinois has invested its pension cash and the return on those investments has fluctuated recently.

“Academics and the credit rating agencies argue that the state’s 8 percent expected investment returns are unrealistic and make the pension systems look healthier than they actually are,” Dabrowski said.

The State Budget Solutions report takes Illinois to task for expecting too much.

“We chose a lower rate (3.22 percent) because the current practice of relying on optimistic investment return assumptions obscures the true size of liabilities,” State Budget Solutions editor Cory Eucalitto said. “Plans are not guaranteed to achieve a return simply because it is assumed.”

State Budget Solutions’ 3 percent rate of return — compared with Illinois’ assumed 8 percent — nearly triples the state’s pension debt.

“The numbers that we gathered from the plans themselves showed a $99.7 billion unfunded liability. Using the lower rate shows that number to actually be $287 billion,” Eucalitto said.

Abdon Pallasch, budget spokesman for Illinois Gov. Pat Quinn, said the governor is sticking with the $100 billion pension debt estimate — for now. 

“The Teachers Retirement System, the state’s largest pension fund, just last year revised down its rate from 8.5 percent to 8 percent,” Pallasch noted. “In response, the governor’s Office of Management and Budget revised upward its projected pension shortfall to $100 billion.”

Pallasch said no matter the number, Quinn wants to “reform” Illinois’ worst-in-the-nation pension systems.

But reform is not a part of the equation for either the Illinois Policy Institute or the editors at State Budget Solutions. Both want a new system.

“The best solution is an immediate switch to a defined contribution retirement system,” Eucalitto said. “These systems are proven to provide retirement security in the private sector, and (offer) greater assurance that employers will make their promised contributions.”

Dabrowski has long championed 401(k)-style retirement system for public workers.

“Illinois workers and retirees are trapped in a collapsing system over which they have no control. That’s the result of the state not allowing workers to manage their own retirement savings. And as the Detroit crisis reveals, retirees can’t escape the consequences of bankruptcy,” Dabrowski said.


From the Newsroom

QuincyJournal on Twitter

QuincyJournal 1 hour, 3 minutes ago

Court-appointed monitor ordered for IDOT hiring http://t.co/B4kLkltKDn
Bob Gough on Twitter

Bob Gough 2 hours, 49 minutes ago

RT @ILCampaignCash: All in!! $50,000.00 from Citizens for John Cullerton to Taxpayers for Quinn. http://t.co/TUWN6OwsXS
Bob Gough on Twitter

Bob Gough 3 hours, 32 minutes ago

RT @lincoln_elbe3: Qhs soccer game on Quincy journal! #LG #qhs
QuincyJournal on Twitter

QuincyJournal 7 hours, 1 minute ago

Sun-Times reporter quits; Cites lack of support from paper following stories on Rauner http://t.co/vaJDsirHJF