Welcome to City-Data.com Forum!
U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > U.S. Forums > Illinois
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 07-25-2020, 03:06 PM
 
Location: Springfield, Illinois
29 posts, read 110,285 times
Reputation: 43

Advertisements

I'm in a somewhat similar situation to the OP. 56 years old, have worked for the state for 13 years.

I have been hearing all sorts of doom and gloom predictions about IL and its pension plan for years and the question I have is: at this point in my life, would it be worth it to try to get a different job, or would it be better to just hold out until I can retire?

I'm in Tier 1 so the earliest I could retire is at age 60*, but I would not be eligible for SS at that point. At age 63 I could retire and have my portion of the health insurance premium covered 100% (when state workers/retirees talk about getting "free" health insurance after 20 years, this is what they mean; you still have to pay for any dependents). I'd have to wait until 65 to get Medicare and until 67 to get "full" SS.

If I quit now, I might avoid getting left holding the bag when/if the SHTF, but if that doesn't happen, I would only be "throwing away" a lot of potential future benefits. If I wait, I accumulate more benefits, but then again, what if those benefits are gone by the time I retire? And what realistically is the chance that someone of my age could get another job with comparable pay? We do not own our home and could theoretically move at any time.

*Tier 1 employees can retire before age 60 if their age and years of working for the state add up to at least 85 -- the so-called "rule of 85". For example, if you are 55 and have worked 30 years you can retire. This rule has enabled many state workers to retire in their 50s but it would make no difference to me since I started working for the state at a later age than many others.
Reply With Quote Quick reply to this message

 
Old 07-25-2020, 05:08 PM
 
Location: broke leftist craphole Illizuela
10,326 posts, read 17,336,680 times
Reputation: 20321
I don't think the pensions are going to just disappear completely in bankruptcy but at some point the math is going to force their to be a renegotiation and haircut into something reasonable. Whether that is a 30% haircut or a 50% haircut noone can say until it happens. My guess is Covid costs and the accompanying recession is going to force that to happen in the next 3 years. As long as their are 40 Republicans in the Senate Illinois is not going to get a $200E9 or whatever the number is now bailout.
Reply With Quote Quick reply to this message
 
Old 07-28-2020, 08:47 PM
 
997 posts, read 839,484 times
Reputation: 826
Quote:
Originally Posted by Lainer View Post
I'm in a somewhat similar situation to the OP. 56 years old, have worked for the state for 13 years.

I have been hearing all sorts of doom and gloom predictions about IL and its pension plan for years and the question I have is: at this point in my life, would it be worth it to try to get a different job, or would it be better to just hold out until I can retire?

I'm in Tier 1 so the earliest I could retire is at age 60*, but I would not be eligible for SS at that point. At age 63 I could retire and have my portion of the health insurance premium covered 100% (when state workers/retirees talk about getting "free" health insurance after 20 years, this is what they mean; you still have to pay for any dependents). I'd have to wait until 65 to get Medicare and until 67 to get "full" SS.

If I quit now, I might avoid getting left holding the bag when/if the SHTF, but if that doesn't happen, I would only be "throwing away" a lot of potential future benefits. If I wait, I accumulate more benefits, but then again, what if those benefits are gone by the time I retire? And what realistically is the chance that someone of my age could get another job with comparable pay? We do not own our home and could theoretically move at any time.

*Tier 1 employees can retire before age 60 if their age and years of working for the state add up to at least 85 -- the so-called "rule of 85". For example, if you are 55 and have worked 30 years you can retire. This rule has enabled many state workers to retire in their 50s but it would make no difference to me since I started working for the state at a later age than many others.
I would hang on if I were you. I left an electric utility at 42, I was never home always working. I could draw my pension at 50 (reduced), but couldn’t get retired medical till 55. I decided that I wasn’t going to continue working 7 days a week with many 16 hour days and then when I’m 54 1/2 they pull the retiree medical. Well, fast forward now more than 15 years, they still have medical and I’d be retired with very large pension (instead of a reduced one). I’ll get medical from the contractors in about 2 years so not a huge deal, but I have to work a few more years. I should’ve stayed.
I don’t believe the state workers will be taking a hit and certainly not ones that are like you, so close to retirement. I assumed all state workers didn’t pay into social security, is your state job subject to fica taxes?
Reply With Quote Quick reply to this message
 
Old 09-14-2020, 04:42 PM
 
195 posts, read 134,372 times
Reputation: 405
Quote:
Originally Posted by MSchemist80 View Post
I don't think the pensions are going to just disappear completely in bankruptcy but at some point the math is going to force their to be a renegotiation and haircut into something reasonable. Whether that is a 30% haircut or a 50% haircut noone can say until it happens. My guess is Covid costs and the accompanying recession is going to force that to happen in the next 3 years. As long as their are 40 Republicans in the Senate Illinois is not going to get a $200E9 or whatever the number is now bailout.
u hit it on the head. the bankruptcy code is the only way out as of now. Its basically the legal instrument that can crack open a union contract or any financial contract, even a constitutional contract. A bailout would simply leave politicians unaccoutable amd the state will have its hand put agaim in the future.. But perhaps bailout can be viable if a federal overseer can force reform on the state and overule the legislature and governor on fiscal matters
Reply With Quote Quick reply to this message
 
Old 09-19-2020, 02:12 AM
 
Location: Arizona
3,763 posts, read 6,676,209 times
Reputation: 2396
I moved out of IL years ago relocating to AZ. Most of my family is still in IL, I actually recently came across a job in IL who wants to bring me on board. Its a county govt job that I assume dips into some kind of state pension. As much as I want to be closer to family, the financial state of IL is not appealing. Real estate taxes are awful...not to mention the winters. Is it worth it to move?
Reply With Quote Quick reply to this message
 
Old 09-19-2020, 08:26 AM
 
180 posts, read 125,995 times
Reputation: 505
Under the US Constitution a state cannot go bankrupt. Please see Article 1, Section 10, which prevents states from “impairing contracts”. In other words, states are barred from claiming insolvency in the event that they cannot pay their state bonds. In addition, there is a federal statute on the books which disallows states from filing bankruptcy. Why? See the same constitutional provision. As the states cannot impair contracts, it would mean that the Federal Government would have to pick up the tab. This is why all states have to balance their budgets. There is a Supreme Court case on this from the 1970’s that I remember from law school, which held that states cannot file bankruptcy since it would violate not only this provision, but also state sovereignty under the 10th and 11th amendments.

States can default on debts, which basically just means that can’t or won’t pay. Arkansas did so in the 1930’s. In that case, the injured parties (I.e. creditors) would have to run to court to have their claims recorded. The next question becomes whether such claims would be allowed, again due to sovereign immunity. The whole thing is filled with uncertainty. Likely you would have a privately negotiated debt restructuring, similar to say Argentina in 2015-16. This is actually what happened in Arkansas.

Now, a municipal government such as a city or county can file bankruptcy. We have had several of those in recent US history, including: Jefferson County/Birmingham AL; Detroit, MI; and Orange County, CA just to name a few. Heck, the former Milton County, GA was in such dire straits during the Great Depression that it dissolved itself and merged into Fulton County, GA, which is why Fulton County has such a funny shape.

As an aside, please keep in mind that one of the main drivers for the drafting of the US Constitution was to eliminate state level debt and put it on the National Government’s books. Please read up on the Hamilton Plan if you need a refresher course.
Reply With Quote Quick reply to this message
 
Old 09-19-2020, 04:24 PM
 
148 posts, read 119,994 times
Reputation: 399
Quote:
Originally Posted by mattywo85 View Post
I moved out of IL years ago relocating to AZ. Most of my family is still in IL, I actually recently came across a job in IL who wants to bring me on board. Its a county govt job that I assume dips into some kind of state pension. As much as I want to be closer to family, the financial state of IL is not appealing. Real estate taxes are awful...not to mention the winters. Is it worth it to move?
No its not. Pass on the job & explain why to them. If enough people do that it will force reforms.
Reply With Quote Quick reply to this message
 
Old 09-19-2020, 10:32 PM
 
3,154 posts, read 2,032,937 times
Reputation: 9288
Quote:
Originally Posted by CoogHawk View Post
Under the US Constitution a state cannot go bankrupt. Please see Article 1, Section 10, which prevents states from “impairing contracts”. In other words, states are barred from claiming insolvency in the event that they cannot pay their state bonds. In addition, there is a federal statute on the books which disallows states from filing bankruptcy. Why? See the same constitutional provision. As the states cannot impair contracts, it would mean that the Federal Government would have to pick up the tab. This is why all states have to balance their budgets. There is a Supreme Court case on this from the 1970’s that I remember from law school, which held that states cannot file bankruptcy since it would violate not only this provision, but also state sovereignty under the 10th and 11th amendments.

States can default on debts, which basically just means that can’t or won’t pay. Arkansas did so in the 1930’s. In that case, the injured parties (I.e. creditors) would have to run to court to have their claims recorded. The next question becomes whether such claims would be allowed, again due to sovereign immunity. The whole thing is filled with uncertainty. Likely you would have a privately negotiated debt restructuring, similar to say Argentina in 2015-16. This is actually what happened in Arkansas.

Now, a municipal government such as a city or county can file bankruptcy. We have had several of those in recent US history, including: Jefferson County/Birmingham AL; Detroit, MI; and Orange County, CA just to name a few. Heck, the former Milton County, GA was in such dire straits during the Great Depression that it dissolved itself and merged into Fulton County, GA, which is why Fulton County has such a funny shape.

As an aside, please keep in mind that one of the main drivers for the drafting of the US Constitution was to eliminate state level debt and put it on the National Government’s books. Please read up on the Hamilton Plan if you need a refresher course.
If the bolded is true, then why are so many states allowed to have so much debt? Not to mention the amount of "unfunded liabilities" (like pension debt), for which Illinois is the Poster Child. Not trying to be snarky, just want to know how both things can exist at the same time.

Not sure if it's been stated yet, but Illinois municipalities are forbidden from declaring bankruptcy without state authorization. My guess is if this rule did not exist, there would be a rush toward the door for many "broke" cities to file Chapter-Whatever in Illinois.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:


Settings
X
Data:
Loading data...
Based on 2000-2020 data
Loading data...

123
Hide US histogram


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > U.S. Forums > Illinois

All times are GMT -6.

© 2005-2024, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top