Rep. Mark Batinick, R-Plainfield, explains his lump-sum pension bill during a hearing before Representative Elaine Nekritz’ House Personnel and Pensions Committee yesterday.
Pension buy-out? Not that I want to prejudge… But… Consider the source! Does Nekritz have nothing better to do than think of hair-brained idiocies? How did Einstein define “insanity?” She needs to be placed long-term on some kind of farm that specializes in psychological rehabilitation. I realize that we’ve mentioned “revenue” millions of times or more in written and spoken word among us, but apparently it hasn’t yet dawned on our one-track minded Elaine that her time might be spent more productively on… let’s say, “R-E-V-E-N-U-E?” Then again…
I thought that Fortner, among Republicans at least, had some horse sense. At a legislative breakfast two years ago, he agreed with Ralph Martire’s idea that the “pension ramp” needed to go and the “unfunded liability” had to be refinanced over a longer term. It seems that his “horse sense” had a brief shelf life. Unlike Nekritz, Fortner does have a major excuse: He’s a Republican.
I have a strong feeling that we’re all suffering from “Nekritz fatigue.” She’s a human (?) whack-a-mole. It’s as if she were put on this Earth just to torment us. To paraphrase Henry II (Plantagenet / 1133 – 1189 A.D.) in reference to Thomas A Becket, Archbishop of Canterbury, at the height of their long church-state dispute: “Will no one rid us of this meddlesome Democrat?”
Elaine, enough already!!! Your greatest contribution to the people of Illinois would be a long stay on that farm for psychological rehabilitation.
– Karl-Heinz Gabbey
So Elaine Nekritz is updating our pension with some brilliant expertise. Now the pension, which was originally designated solely for the retiree, must be shared with a “vendor” and some “additional experts”.
I’ve followed your articles for three years now. This “scheme”is as dumb as Nekritz looks. I negotiated three contracts for district 230 and as an Accounting teacher with 38 years of experience before I retired, in 2004, I can’t believe that these people think teachers are so unaware of financial matters that they would even consider this. Dementia would be a qualification.
I have read elsewhere that the lump-sum payout in the Batinick bill would be 80% of the present value of benefits to be received, based on average life expectancy as estimated by the pension fund actuaries and based on assumed pension fund investment returns. A person would be eligible to choose a full or partial lump sum only one-time when they retire.
The problem I see is that this is likely to cost the state money (the opposite of what is intended). Workers have a lot of choice in picking their retirement date. So basically, if someone gets a terminal cancer diagnosis anytime between age 55 and when they retire, In most cases they will be able to retire immediately, take the lump sum, and they and their families get more than otherwise over the worker’s (unfortunately short) remaining lifetime. In insurance this is called adverse selection, and it is the main reason private health insurance premiums were so high before the ACA (sick people were more likely to apply for policies), and why insurance companies are losing money on ACA enrollees (because this is still the case and the ACA bars medical underwriting). Now I understand that not everyone behaves rationally, and that some healthy retirees will choose the lump sum even though it may not be in their best interest. However, the average state employee is well-educated, and I would not gamble on the collective irrationality of the state workforce. If the proportion of state employees who behave rationally exceeds 50%, the state is likely to lose money under this scheme.