Rep. Ives and Rep. Tom Morrison (R-Palatine) joined the Illinois Policy Institute in rolling out HB 3303

March 6, 2013 By Jeanne Ives 6 Comments

Rep. Ives and Rep. Tom Morrison (R-Palatine) joined the Illinois Policy Institute in rolling out HB 3303. The proposed reforms are detailed in the Institute’s alternative state budget, dubbed “Budget Solutions 2014,” which:

Immediately reduces the unfunded liability by about half, or $46 billion
Replaces the irresponsible repayment ramp with level payments
Reduces the state’s annual pension contribution by more than $2 billion in the first year and eliminates the state’s unfunded liability by 2045
Empowers workers to control their retirement savings going forward with 401(k)-style plans modeled after the existing State Universities Retirement System’s 401(a) plan

For more information, click here: http://illinoisreview.typepad.com/illinoisreview/2013/02/illinois-policy-institute-proposes-plan-to-fix-states-budget-pension-problems.html#

To see Jeanne’s statement on HB 3303 at the press conference

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Filed Under: Public Pension Crisis, State Legislature, Top Stories

Wolf

The legislation proposes a some savings in the near term and eliminates the unfunded liability over 30 years hence. This is the Politicians famous solutions that resolve issues decades hence if at that. The Public Sector Pensions are a basic fraud on the taxpayers of this state or for that matter the nation if one examines the entire Public Sector. Starting with a guaranteed payout of over 85% of the final salary plus exorbitant COLAs when the investments are put into Hedge Funds at a 7.85% or better return. The first problem here is guaranteeing any investment at these return rates where the risks are substantial for major loses especially over significant periods of the investment. If this was the private investment of these Public Sector members than they bear the risk and consequences but putting this on the backs of the taxpayers is truly fraud. Add to this the inflating of the final salaries in the last 4 to 6 years prior to retirement of 40% or more and this pension scam is amplified further. If one was to perform a financial analysis on the contribution levels for a retirement investment that is extremely low risk than a risk free rate should be used for the investment in which case the payouts for these investment would be around $44K annually. Therefore the pension reform should cap the maximum payouts for these plans at $50K annually and use the annual Social Security COLAs for any increases. All members less than 35 years and all new employees should be placed into Social Security, Medicare and a self-directed 401K with a maximum 3% match. The taxpayers of this state or for that matter of this nation should provide no backstop for the retirement investments of the Public Sector. This fraud needs to be addressed today and the fraudulent obligations of trillions for these multi-million dollar retirement plans should end and the Public Sector executives who contrived these plans should be prosecuted for the hundreds of billions they extracted from the taxpayers for this scam. The oppressive taxation levels today to support the Kings and Queens of the Public Sector ends, and we start to restore our private sector and the economy. The 50% over staffing and compensation levels on top of this pension fraud is the primary reason for the impending bankruptcy of the state and the nation as a whole. There is no room for any compromise here.
- ajd81
  
  Wolf, in Illinois, public sector employees can earn a maximum of 80% of their average salary of the last four years of service. The 2nd tier isn’t so generous. In addition, public sector workers must work 32 years to reach 80%.
  
  The reason the pension crisis exists is because of the state’s refusal to pay it’s full share of the public pension costs. No one makes qualms about the IMRF, because the municipalities that participate in it are fully funding their shares. Because the state has not paid it’s portion to the tune of $100 billion, the state finds itself in a predicament it does not wish to be in. None of us want to owe $100 billion. In addition, the General Assembly has given themselves such generous pension benefits (100% of final salary after 20 years, pension benefits at age 62 with four years of service, or 8 years at age 55. 5% per year after the 12th year of service, while for state employees, we get half that after 20 years).
  
  Your claim that putting the risk on the back of taxpayers is truly fraud is simply untrue. Taxpayers of Illinois have benefited from the state pension fund (SRS, State Retirement System), and were not supposed to. New pork projects such as new roads, bridges, school improvements, etc…ever since the 1950′s that couldn’t be paid for out of the General Revenue Fund were funded out of the SRS. All monies designated for the SRS were not to be used for any other purpose. To be clear, by paying for project out of the SRS instead of the General Revenue Fund, the state has not been living within it’s means.
  
  Now that the time has come to return the monies designated for the SRS, the state feels it cannot do so without inflicting massive pain on the same taxpayers who have A: benefited already from the SRS, and B: vote for those same politicians who have the ability to restore the SRS to full funding. So rather than doing the correct thing, which is to restore the SRS to full funding without cutting the benefits of those who have already paid their portion (for state employees, we contribute 8% of our gross salary), they choose instead to make state employees pay more as well as be forced to take benefit cuts. It’s no different than me coming to your house, taking your money, then making you pay to get a reduced portion of it back. It’s not fair, it’s not right, and the only truly fair solution is to fully restore the monies owed without cutting benefits.
ajd81

I’m a public employee, and there are two bills I support in S’field to deal with the pension crisis. The bill the We Are One coalition supports, and this one. The We Are One coalition endorsed bill is truly, the only fair solution that is on the table. However, any bill that would take money out of the hands of politicians when it comes to my retirement has my support. Giving money to a politician is like giving a young wildebeest to a hungry lion.