Crain’s pension forum: Death and double talk.

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Mayor Lightfoot says it’s time to address the pension issue.

A voice for Chicago’s corporations, Crain’s Chicago Business is taking the opportunity of a new Illinois governor and new Chicago mayor to weigh in on the state’s pressing issues.

This month it is pensions.

They even take credit for Mayor Lightfoot’s speech last week at the luncheon of the Chicago Federation.

Without any details, Mayor Lightfoot said in her luncheon address that this was the time to deal with the pension issue.

Naturally, Crain’s thought that she got the idea for that from them.

I’ve been saying it was time to address the pension issue for years. Maybe I should take credit for Mayor Lightfoot saying it.

Crain’s pension special report – not the easiest thing to navigate online – was filled with misinformation.

I want to address just two things I found in it.

“Spending on pensions overtakes spending on children’s education.”

This is a lie.

In fact, they say just the opposite in their very next sentence.

“The cost of servicing Illinois’ pension debt continues to soar, devouring state government resources.”

Which is it?

Is it spending on pensions or servicing the debt?

Let me answer that.

Roughly 70% of the dollars the state needs for the pension budget line goes to paying interest on the debt for past pension holidays and underfunding.

It is not being spent on us or on the pensions we receive.

If the state were just paying for employee pensions, not only would the costs not be overtaking education spending, it would be a totally manageable expense.

Buried deep in the Crain’s report is this pension solution:

“To put it bluntly, the people who get the biggest Tier 1 checks eventually will die off, replaced by cheaper newbies.”

Tier I pensioners are people like me, hired before January 1, 2011.

Tier II employees, hired after that date, are being screwed. In fact, they are the main ones who are paying the debt, slowing the amount it increases.

When Tier I teachers, people like me, “die off,” part of the pension problem will be solved.

Nice.

I hope as Mayor Lightfoot fleshes out her plans to address the pension issue, waiting for me or my Chicago colleagues to die isn’t part of it.

 

 

7 thoughts on “Crain’s pension forum: Death and double talk.

  1. At least they’re waiting for us to die rather than taking active steps, which I’m sure has crossed the minds of more than a few. I’m with Lyons, to help them…a new state law that provides free cigarettes for all public retirees. And… Public employees who are retired:

    -no longer will be required to wear seatbelts. -can apply for free backyard insect spraying year ‘round. -may ignore all warnings at pedestrian crossings.

    Hope you’re well, Fred.

    JD

    >

  2. I read that too and was appalled. How nice of them to remind us that death is around the corner But even when pensioners “die off” they often leave a widow/widower (like me) who is still entitled to half of our deceased spouses benefits. So even dying won’t solve the issues. I’m not going anywhere anytime soon.

  3. Fred, your last act of public service, Fred, will save the state of Illinois thousand of dollars. Bob

    Sent from my iPhone

    >

  4. True they can’t wait for us to die off, both state and city pols. I just hope (I know it’s a wild dream) that before we meet our maker that those that not only screwed us the retirees but future retirees also will be brought before federal judges to answer for the suffering they caused the very people who served them and the citizens all those years

  5. We are tired of skewed coverage regarding so-called pension reform, and we are tired of the media’s omission of the most significant facts about public pension debt and anyone who talks or writes about “spending money on pensions overtakes spending on children’s education,” or the state’s bond ratings, cuts to services, and the siphoning of the state’s money from public safety and human services because of “failed pension reform.”

    Every editorial, every article and interview, and every legislative session about Illinois public pension reform should begin with these statements:

    The public pension systems were not and are still not the cause of the state’s budget deficits. The state’s budget deficits were triggered by past policymakers’ corruption, arrogance and irresponsibility and are currently perpetuated by some members of this General Assembly. The state’s pension debt and revenue problems need to become the emphasis. Why?

    Because Illinois policymakers have consistently failed to make the annual required contributions to the state’s pension systems, primarily because they could pay for services and their “pet projects” without raising taxes and, in 1995, policymakers created a flawed re-funding schedule and have refused to correctly amortize the pension systems’ unfunded liabilities since then.

    Instead, Illinois policymakers have favored corporate interests rather than the interests of their citizenry and; thus, they continue to sabotage the public employees’ retirement plans and the State of Illinois’ future economic solvency through mismanagement and fiscal irresponsibility.
    Illinois policymakers left us with a fiscal disaster, and so-called “pension reform” (or breaking a constitutional contract) will never resolve today’s $135+ billion unfunded liability. Had Illinois legislators paid into the pension systems throughout the years, we might actually be realizing pension savings.

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