Illinois pension buyout plan is a bust and I’m shocked – shocked – to know there’s gambling going on.

Those running this state never give up on trying to avoid confronting the state’s huge public pension debt with anything but stupid schemes instead of timely, actuarial payments.

They tried their schemes again when they all praised themselves for agreeing to Rauner’s third budget try.

They included a pension buyout plan in the bill.

I wrote about it here.

I said it was stupid at the time.

Their brilliant idea was that the savings would come from voluntary buyout programs for people eligible for state pensions. Former public workers who are vested in the pension system would have the option to completely cash out their pensions at 60 percent of the value, which they could then invest on their own.

Well, hell, what retiree with a constitutionally guaranteed pension with an annual 3% compounded increase wouldn’t want to cash in their pension at 60% of its value?

I guess I might think about it if I was suffering from dementia and nobody was watching out for me, or on my death bed.

Illinois legislators promised this would save hundreds of millions of dollars in pension costs and cited actuarial studies showing the same.

Only the legislature’s actuaries, according to a report by the Civic Federation, studied the wrong bill.

Flaws in actuarial methodology relating to benefit projections and utilization assumptions also contributed to the inflated savings estimate in FY2019, according to SERS officials. Additionally, the General Assembly appears to have based its savings estimate on the total State contribution for SERS instead of the General Funds contribution.

Oops.

General Funds savings of $11 million were far below the projected $279 million partly because the projection was based on an actuarial review of a different buyout proposal, SERS officials said. Among other differences, that proposal extended through FY2045, while the enacted COLA buyout ended in FY2021. y to increase State savings.

That should increase your confidence level in the legislators and their “studies.”

So, rather than saving hundreds of millions of dollars, the state saved zero dollars from the Teacher Retirement System,

Stop the schemes. Just pay the bill.