Protecting the Pension from Politician’s Hands
One of the main pieces of reform Illinois desperately needs is within our pension system. For years Illinois’ legislators have been borrowing money from the pension fund to pay for its budget shortfalls and countless pork projects. When many of the older state employees start to take retirement, our state will owe billions of dollars we don’t have. To eliminate this potentially dangerous event, we need to implement comprehensive pension reform. By adopting two proven reforms, we can protect ourselves from serious problems in the future.
Adopt A Two-Tier System
States across the nation are beginning to realize the value in adopting the private sector’s method of defined contribution plans. Illinois could adopt this policy as an alternative approach for all new hires. Currently, Michigan implements a similar system, where employees contribute a minimum of 4% of annual compensation into an account with the State matching. This type of system works because employees are responsible for their retirement and government cannot interfere with their lives after service.
All current employees would continue with their defined benefit plan, with an option to convert to the defined contribution plan. Over time, this two-tiered system would save the State of Illinois billions of dollars and protect us from the mess we’re currently in.
The two-tier system would be phased out as the current employees retire and newly hired employees continue on the defined contribution plan. This fiscally responsible policy protects State employees from the government spending pension fund money and protects taxpayers from funding the mistakes of politicians.
Change the Status Quo
Aside from developing a two-tier system to combat rising unfunded pensions, we need to make a variety of changes to the current system to resemble the private sector proven method. First, we should raise the minimum retirement age of public employees to a comparable 60 years. Social Security and private companies have higher retirement ages, and Illinois should follow suit.
Second, we need to stop allowing politicians to decide their own pension benefits. Keeping their hands off of their pension plans will reduce the amount of corrupting and luxurious packages.
Politicians should also be limited in their ability to collect two pensions. Double dipping into private retirement benefits and state-funded pensions has resulted in retired officials benefitting generously from your tax dollars. Finally, I would like to see a minimum time in service before pension benefits become available.
We need to protect the Pension Fund in Illinois from the hands of the General Assembly and the Governor. Due to the dipping hands of politicians, unfunded liabilities have reduced the bond rating of Illinois and ultimately hurt our whole economy. As your Representative, I want to offer fair retirement plans to our state employees and protect taxpayers from future fiscal shortfalls. Currently the system is not sustainable and we need to implement policy now. If we continue to allow the current system, we will end up like California, running huge deficits and taking out large loans to pay for retired employees.