Steps one, two, and three — agree or disagree? Published by Jane the Actuary View all posts by Jane the Actuary
4 thoughts on “Forbes post, “Three Steps To Fixing Illinois’ Pension Crisis””
I don’t see an incentive for Pritzker or any of the Il legistators to do anything regarding the deficit. While your ideas seem like they could be very effective, they will harm the voting base of the the democrats. You see in Il, the public sector unions get great retirement benefits and salaries and in return, they continually re-elect those who will continue to give them those benefits. Doing the right thing in Il govt regarding fiscal responsibility means potentially not getting re-elected. Elected officials have known for years that it could all come crashing down but it would be in the future, when they’re long gone ie: retired, moved, both or dead but they still get their pensions so what do they care? The same goes with our current legislators, no matter how bad things get in Illinois, Mike Madigan and the rest of them still get their guaranteed pensions and will likely move when the sh*t hits the fan. Illinois is f**ked – sadly, the only reasonable thing to do is move.
“At present, all participants, except those hired in 2011 or later, are guaranteed 3% annual benefit adjustments on their entire retirement income, regardless of the year’s actual inflation. It should go without saying that the very first benefit reform is to replace the fixed 3% with a true CPI adjustment with a maximum of 3%.”
WRONG. My wife retired from the University of Illinois as a Civil Servant for 30 years. The SURS Retirement contribution consists of 6.5% for Normal Retirement Benefit, 0.5% for Automatic Annual Increase, 1% for Survivors Benefit for a total 8% taken out of each and every check for 30 years. The state never fulfilled their end of the contract. A real actuarial would know the difference between a Cost of Living adjustment and a paid up front Automatic Annual Increase. As she always says.8% is a lot when you are making $2.35 /hour when she started on campus.
Thank you for listening
What does the contribution have to do with the COLA? The 3% compounded COLA is unsustainable and flat-out ridiculous. Her is point is very well made.