Was I joking yesterday when I said that Illinois legislators – none who are currently addressing the $137.2 unfunded public employee pension liability – were hoping for our early demise to solve the problem?
The Daily Herald reports that “the backsliding resulted from factors including earning $1 billion less than projected on investments, spending $600 million extra because pensioners are living longer, and the state contributing $2.7 billion less than needed to catch up on funding.”
Someone suggested to me yesterday that we should be open to working longer as a way to save on the cost of Social Security, public pensions and other social programs that retirees depend on.
After all, they argued, these programs were established when the U.S. life expectancy was much shorter.
To me this turns things on their heads. If we establish a social program that demonstrably has our people living longer and living better, wouldn’t you say those programs were a success? And then, building on that success, wouldn’t a smart system expand on the success.
This is the basis for Sanders and Warren calling for Medicare for All.
We should find it disturbing that only the United States among advanced industrialized countries shows declining mortality rates among its middle-aged population due to the lack social support systems like national health care.
Aside from the huge hundred billion dollar unfunded pension liability, the state has also failed to pay its bill to retiree health care.
“Pay-as-you-go Illinois currently is putting in just 11.1 percent of the total needed to meet annual costs and pay interest on deferred costs each year. And relative to paying those two and actually reducing the debt, it contributes just 7.5 percent of what would be needed to eventually reach full funding,” reports Greg Hinz in today’s Crain’s Chicago Business.
According to a report last week from S&P Global Ratings, Illinois as of the end of fiscal 2018 had $41.3 billion in unfunded Other Post Employment Benefits (OPEBs), in our case, retiree health care.“
The Illinois Supreme Court has ruled that retiree health care insurance is part of our retirement benefit and is equally protected by the pension protection clause of our state’s constitution.
It cannot be diminished or impaired.
Naturally some see the solution as cutting the benefit.
The situation with retiree health care benefits is the same as with the pension systems. It is rooted in the failure of the state to pay what it owes.
Of course, this is a revenue problem.
Beyond it being a revenue problem it is a failure of those who run this state to see that a fully funded pension system and a fully funded health care system has meant our retirees live longer and better.
Only in Bizarro World would we see the elderly living longer and living better as something that needs fixing.