America needs to be an Adult: Illinois Retirement unfunded liability = $167 Billion, court rules against state fixes (wages, ethic)
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Illinois has $167,000,000.00 in unfunded state employee benefits (pension + healthcare).
Illinois spends 1 out of every 4 of its tax dollars collected on retired employees.
Illinois passed a law to help alleviate (but not solve) this pension nightmare by making younger workers collect a bit less in retirement, capping the max yearly pension at $110,600 a year (with a few exceptions), and yearly increases tied to inflation not a standard minimum 3% a year.
And workers get to contribute less into the pension by 1%!
And a court said that this was illegal for the state to have done -- so Illinois is back on their disastrous course.
Reminds me of the Detroit Pension, which was bailed out with $1,400,000,000.00 in 2004, while allowing to keep the same union leaders in charge of the pension running the same crappy policies and high management fees that drove it in to the ground to begin with and a decade later it needed to be saved again.
Their best bet is to end lifelong pensions for new hires. Corporations did it years ago and went to the 401K plan.
This has it's own problems though.
If you do it this way, you have a sharp cutoff where people hired before date X have a much higher compensation than people hired after date X, where X is when you make the change. As a result, the vast bulk of the workers for now and a decade+ to come will continue to receive the unsustainable pensions, while for the new people, a lot of positions will pay way under market rate, resulting in either getting people who explicitly are signing up for the, ahem, government work ethic, or are intending to do the revolving door thing in a few years. Making newer government hires second-class workers is a bad idea because you either get second-class people or folks who are there from day one for the purpose of regulatory capture -- and the government becomes even more incompetent, pseudo-corrupt, or both. The solution has to be cutting unsustainable pension costs across the board, not creating a class of new hires with no pensions and under-market wages while existing hires continue to be hugely overpaid -- honestly going through a Detroit-style bankruptcy will cause less harm in the long term than this.
If you do it this way, you have a sharp cutoff where people hired before date X have a much higher compensation than people hired after date X, where X is when you make the change. As a result, the vast bulk of the workers for now and a decade+ to come will continue to receive the unsustainable pensions, while for the new people, a lot of positions will pay way under market rate, resulting in either getting people who explicitly are signing up for the, ahem, government work ethic, or are intending to do the revolving door thing in a few years. Making newer government hires second-class workers is a bad idea because you either get second-class people or folks who are there from day one for the purpose of regulatory capture -- and the government becomes even more incompetent, pseudo-corrupt, or both. The solution has to be cutting unsustainable pension costs across the board, not creating a class of new hires with no pensions and under-market wages while existing hires continue to be hugely overpaid -- honestly going through a Detroit-style bankruptcy will cause less harm in the long term than this.
Corporates did it decades ago. Sure you'll have people on pensions but the number will be dwindling as opposed to growing like it is now in the public sector.
Second class workers ? Really ? Joe Private Sector has been working for decades with no pension in his future..just his 401K, IRA and his own savings.
You want to keep public sector pensions then be prepared to pay for their retirement.
You'll be paying their pensions while you struggle yourself to live in retirement.
If you do it this way, you have a sharp cutoff where people hired before date X have a much higher compensation than people hired after date X, where X is when you make the change. As a result, the vast bulk of the workers for now and a decade+ to come will continue to receive the unsustainable pensions, while for the new people, a lot of positions will pay way under market rate, resulting in either getting people who explicitly are signing up for the, ahem, government work ethic, or are intending to do the revolving door thing in a few years. Making newer government hires second-class workers is a bad idea because you either get second-class people or folks who are there from day one for the purpose of regulatory capture -- and the government becomes even more incompetent, pseudo-corrupt, or both. The solution has to be cutting unsustainable pension costs across the board, not creating a class of new hires with no pensions and under-market wages while existing hires continue to be hugely overpaid -- honestly going through a Detroit-style bankruptcy will cause less harm in the long term than this.
I have worked in the following branches of the federal government.
Federal Reserve
IRS
Passports
And have partnered with the FBI to help shut down a few illegal enterprises..
I can tell you first hand that most government employees are nothing more than paper pushers. I could probably hire people for 1/2 of what most government employees make and you'd never notice the difference.
As the nation watches California and predicts it's demise over unfunded liabilities, the fact that Illinois and New York, on a per capita basis are significantly worse off goes unnoticed. In fact, according to a report ordered by Governor Brown to anaylize per capita debt load as part of preparing a 5 year capital improvement plan showed CA with a per capita unfunded liability of $1600, NY at $2200, and IL at $3100. I've long expected IL to going into default first.
Madigan and his cronies in the Democratic Party have buried us.
In the end, it doesn't matter if a state judge found the pension reform law illegal. It will go to the State Supreme Court. If they find it unconstitutional (which they probably will), Madigan will just have the Illinois Constitution changed. They even had a question posed during the Midterms if it should become easier to amend the constitution.... Of course I voted no.
Progressive utopianism:Sit home, collect a paycheck until you die and don't worry where the money comes from
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