Report: State pension reform needed to avoid 'catastrophic' fate
Taxpayers United of America (TUA) recently released its 10th Annual Illinois State Pensions Report examining the state’s General Assembly Retirement System (GARS), Judges’ Retirement System (JRS), Teachers’ Retirement System (TRS), State Universities Retirement System (SURS), State Employees’ Retirement System (SERS) and the Illinois Municipal Retirement Fund (IMRF).
The report takes an in-depth look at the problems with the state’s pension programs, dating back to 1989, which stem from irresponsible policies and political mistakes, and gave rise to today’s fiscal catastrophe.
“In 1989, Gov. James Thompson (R) agreed to enhance pension benefits by establishing an annual 3 percent compounded cost-of-living adjustment (COLA) increase for retirees beginning January 1, 1990,” the report said. “This single enhancement of government retirees’ benefits is a central contributor to the skyrocketing unfunded liabilities Illinois has accumulated in the nearly three decades since that legislation was enacted.”
Included in the report is a case study of the top 40 pensioners between 2006 and 2016 using projected lifetime pension payouts as a basis.
“Surveying the growth of these pensions over the past decade provides a snapshot of the financial burdens Illinois taxpayers face, illustrating the extent of the unfunded liabilities accrued and the cost of not implementing reform,” according to the report.
Also revealed in the report is that 15,661 state pensioners each collect more than $100,000 annually, and 92,638 state pensioners each collect more than $50,000, based on data collected through Freedom of Information Act (FOIA) requests.
TUA’s updated data for the top 400 Illinois pensioners of 2016 indicate that the total pension payout so far this year alone is $91,573,671, and the total pension collected to date is $657,971,664. The average pension is $228,934, with the average employee pension contribution being $266,671. The average estimated lifetime pension payout is $5,697,754.
“Although the current options to address the state’s government pension crisis are limited for policymakers, our research concludes that immediate reforms are necessary to avoid an even more catastrophic financial landscape in the near future,” the report said. “Solutions must focus on long-term solvency in the interest of both government retirees and taxpayers.”
Republican Gov. Bruce Rauner has championed pension reform in Illinois, both on the campaign trail and since taking office last year. But with Democrats controlling both chambers of the General Assembly, Rauner has faced significant push-back.
“Illinois’ government-employee pensions are unsustainable,” Jared Labell, TUA’s executive director, said in a press release. “The Illinois Constitution’s pension-protection clause – Article XIII, Section 5 – unfairly chains generations of taxpayers to an uncontrolled financial burden created by the disastrous decisions of politicians in Springfield.”