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They should have never been allowed to get so far in the hole.
Pensions are a promise to be funded. The state, quasi-state and county agencies should all be SOT this time.
Let'em sink. Hold the politicians responsible personally for being so bad at their jobs.
Agreed. 40 billion with a B. How does it get that far out of control? The answer is easy.. Spending other peoples money is easy and when you have an unlimited credit card it's even easier to spend like there is no limit.
Time to re-open this thread, & perhaps widen it to include ALL city, county, & State gov't pension funds.
The Dems are asking for $1T to bail out local pension funds everywhere in C-19 phase 4 stimulus now in negotiations.
Time to write you Congressperson, and Senators...today.
I think it was Moody’s who projected all state/ municipal public pension plans collectively lost $1 Trillion in the market downturn which began in February.
With the exception of Wisconsin, this impacts all states. Wisconsin is unique because it requires plan participants to share in loses when returns are below expectations.
Of course those states that were seriously underfunded at the beginning of the year, are is a worse situation, right now.
The majority of states have the ability to modify accrued benefits, should it be necessary. Illinois is one of 7 that does not.
The percent funded is a meaningless number unless one understands the unique to the state models used to determine funding.
The Pension Benefit Guarantee Corp ( PBGC) has temporarily modified funding requirements for private employer plans due to dismal ROI.
I think it was Moody’s who projected all state/ municipal public pension plans collectively lost $1 Trillion in the market downturn which began in February.
A) Most pensions were severely underfunded YEARS/DECADES before Covid-19.
B) Most of that $1 Trillion has been regained.
C) What is the lesson here, you can keep voting in incompetent politicians and union leaders to run a fairy-tale-land-math on the pensions, promising everyone a free lunch and any pension properly run doesn't get bailed out?
Illinois has long been a state with mob influences in their politics and in their schools. Their pension programs never were viable vs. the investments made by the governmental agencies.
And I'm so sorry for the workers that were promised "pie in the sky" pensions they didn't earn or deserve.
My suggestion: liquidation and bankruptcy Let them take what's there and divide it up. And too bad so many of those in control are probably dead and gone--unaccountable to the employees. They've got to answer to a higher authority for what they've done.
Quote:
Originally Posted by jjbradleynyc
I've read the pensions are far too high in Illinois.
Terrible situation to be in. A declining population state. A greying state. A ballooning pension and a ballooning deficit.
I think folks are going to have to take huge pension cuts. Bankruptcy may loom for the state. It is what it is, sadly.
Don't bet on it. Mitch McConnell has indicated states can file bankruptcy and they just asked JB about it and he said no. I am guessing they would have to cut pensions so that's why.
Quote:
Originally Posted by beach43ofus
I agree,the 1st to flee can typically sell their homes for a decent selling price, but after the flight becomes common knowlege the prices begin to fall. You don't want to be late in getting out of there.
That ship has sailed.
Quote:
Originally Posted by beach43ofus
Contracts can be broken/altered. When the payments can no longer be made, something will have to give. Everyone will lose some skin, pensioners, and taxpayers alike. If I were a State of Illinois pensioner, I'd be planning to take some kind of hit at some time in the next 1-3 years.
Again, don't bet on it. Pensions get paid first. The ones who suffer are the social programs and school obligations which the state has been reneging on for years.
Quote:
Originally Posted by middle-aged mom
Hyperbole much?
A 100% loss on property? I don’t think so.
California has the highest progressive income tax rates in the US. The property values in desirable areas have certainly not declined.
Our neighbor to the north, Wisconsin, is in the top ten in terms of progressive income taxes. Illinois is in the bottom ten.
As a resident of Illinois, I am opposed to a Federal bailout of state/ local pensions.
Most state/ local retirees do not have 6 figure annual pension benefits. The average benefit which includes the 6 figure outliers is in the $50,000/ year range.
What you don't mention though, is that Illinois has the total highest tax burden in the country.
Quote:
Originally Posted by PedroMartinez
They should drastically raise the taxes on people in Chicago. I'd guess a 20% tax across the board would pit a big dent in it.
They raised the state tax 66-100% in 2017. 100% on higher earners by removing property tax deductions on earners over $500k. I would bet 99.9% of Illinoisans don't even know that. Now they are going to raise them another 70ish percent so I am sure you thought 20% was crazy high but that's not even close. They said in order to cover all JB's spending, they would have to raise the highest bracket to over 13%, on par with California. What's different is that if you hit $1M, you pay the highest proposed rate on ALL the income, no marginal brackets there. The current proposed rate is just under 8%. Those high rates might fly in sunny California, where there are beaches and lovely mountains. Not sure people who don't have to stay will.
A) Most pensions were severely underfunded YEARS/DECADES before Covid-19.
B) Most of that $1 Trillion has been regained.
C) What is the lesson here, you can keep voting in incompetent politicians and union leaders to run a fairy-tale-land-math on the pensions, promising everyone a free lunch and any pension properly run doesn't get bailed out?
McConnell today said he would be open to considering allowing states to file bankruptcy.
The current Federal bankruptcy code allows cities, school districts and local governments to file bankruptcy and renegotiate debt. It does not allow states to do so. If Congress were to change the code and POTUS, debtors would likely file objections based on the contract clause/ Article 10 and land in the lap of the SCOTUS.
The language within the Illinois state constitution may be strong enough to survive a state bankruptcy- that is accrued public benefits are guaranteed.
This is one of the best summaries of the state pension crisis.
Maybe the better debate is who is to ask who is current government pensioner, or is in a pension system for public employees? Identify yourself with your comment.
Me, private sector entire career, including self-employment. Had a pension go puff around 2001. The way it rolls in life. I didn't spend too much time thinking about it, or looking backwards. Way I'm made. I pity those who cannot overcome life's setbacks. Or, at least make a strong effort.
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