57 Comments - Lovie's Leather - Wednesday, Jul 26, 06 @ 3:41 pm: Here’s the Blagojevich idea to solve the retirement problem: FIRE ALL THE REPUBLICANS!!! Great plan, guvna. You not only want to hire all of your own people for non-partisan jobs, but you want to fire all the people against you in the state…. You’re more paranoid than Nixon!!! - Anon2 - Wednesday, Jul 26, 06 @ 3:51 pm: Surprize. Surprize. Blago’s pension plan is a financial disaster. I can’t think of a single supposedly great Blago plan has not been a disaster. His money saving efficiency reorganizagtion plans have turned out to be jokes. His budget reduction plans have resulted in the largest budget deficit in the nation. And, so the sad story goes for all of the supposedly brilliant Blago plans. He is all sound bites with little real substance, including Filan’s fiscal follies. - DOWNSTATE - Wednesday, Jul 26, 06 @ 3:52 pm: Sounds like all the smoke and mirrors of the last 4 years are starting to come out before the election not after like Blago’s boys were hoping.I just love it when a plan blows up in their face.Hey just one more thing to fuel that TOPINKA EXPRESS. - Bill - Wednesday, Jul 26, 06 @ 4:02 pm: Well let’s see…. When the governor took office state pension funds were funded at 48% of liabilities. Now, they are funded at about 60%. That would seem to indicate that there was inprovement over the last 3 years. ..But don’t let the facts get in the way of a good story. - schroedk - Wednesday, Jul 26, 06 @ 4:23 pm: Bill, Do you fall for all of the bullcrap that Blago and Filan try to shovel to you regarding the state budget? Do you also believe that David Copperfield REALLY made the Statue of Liberty disappear??? - anon - Wednesday, Jul 26, 06 @ 4:32 pm: chicago just passed the big-box wage ordinace - Shallow Pharnyx - Wednesday, Jul 26, 06 @ 4:43 pm: Bill, Just so you will know Illinois Commission on Government Forecasting and Accountability (ICGFA), is non-partisan, they are under the GA. This is the group I referred to as Ec & Fisc. They are a group of smart economic analysts who review the numbers and present the straight facts, no fuzzy accounting. Go to their website and check past reports, believe me, you will learn a lot (if you are up to dealing with the truth). - anon.in central illinois - Wednesday, Jul 26, 06 @ 4:45 pm: The really sad thing is this idiot is screwing around with peoples lives & post-work livelyhoods or income! People have worked faithfully for years often doing the same thing & in hopes of some day slowing down & a pension to see them through the retirement years. They’ve paid into the “system” provided & SSI in hopes of reaping the rewards later in life after 20, 25 or 30 + years of service. The funding and care of the {5} pension systems in Illinois is the fiduciary responsiblity of the gov’t to take care of, fund, manage & keep it intact !! It’s just another “glowing” example of the inept nature of this administration. People with a ways to go got to wonder if there will be anything to get …. let alone reduced. If you think it can’t happen look at New Jersey & some of the bigger companies that landed in B/Rupt court & then thumbed their noses at their pension liability. He’s robbed pensioners to pay Paul, Pete & who ever is in line for $$$ due (or past due) ALL while starting new programs with no long range revenue plans & yet more future debt & why you ask ???…to move his personal adjenda or over 2 or 3 news cycles to pump his numbers. Starting programs with no revenue plan {except to borrow again} & in a deficet situation just doesn’t work. Current revenue increases are NOT keeping up with liability let along the “stuff” they are sticking in the drawer & not paying at all !! With the help of the Dem controlled General Assy. he’s set his course & when they say NO he does it anyway IE: Stem Cell. I hope soon people wake up & realize the shape we’re in as a state & a gov’t. This guy & his “tribe” have got to go & the only way that can happen is in November at the polls ! {or by luck an indictment (or several come along) } Stop the madness Bladgo & start paying up !!!! - Little Egypt - Wednesday, Jul 26, 06 @ 4:48 pm: Bill, I’m not sure what world you live in but it sure is a happy place. The only way to solve the underfunding of the State employees pension program is to roll the legislative, executive and judicial branches into it. Those people would never stand for their pension programs being pilfered like is being done to the State employees program. - Wumpus Extremus Maximus - Wednesday, Jul 26, 06 @ 4:51 pm: Does Judy know what her job is as treasurer? It would seem that she’d be an expert to raise valid criticisms of the gov’s actions. What’s she thinkin? - Timbuktu - Wednesday, Jul 26, 06 @ 4:55 pm: Where’s the outrage? - Anonymous - Wednesday, Jul 26, 06 @ 5:17 pm: There are plenty of us outraged, but whenever state employees speak up about it, people who don’t work for the state get riled up and say we have it too good and tell us to shut up. I work hard for what I make and I pay into the system; I’m also a taxpayer who helps pay for what goes into the system. It’s a vicious circle. No one held George accountable when he did the early out which hurt the state when so many people took it, then Rod did it again. He just did it bigger and hurt us worse. Now I’m going to pay for it and so is my kid. It’s no wonder that the general public gets peeved at this kind of stuff. I truly hate the mess the Gov has made of state government and I’m ashamed to say I’m a state employee because it means I work under him. I’m just thankful I know in my heart and mind I got hired the right way long before he came around and I do what I’m supposed to do. I wish someone would make him go away. But no one can erase the mistakes he’s made, like this. This is no quick fix. 10 billion is not going to go away, and he’ll find a way to make it bigger. - anon.in the stykes - Wednesday, Jul 26, 06 @ 5:19 pm: The term “Impeachment” comes to mind !! Malfeasance alone might be one way to approach it !! Take a peek at Article IX “Revenue” in section number 9 titled “State debts” might be another place to start & see what can be found!? - Arthur Andersen - Wednesday, Jul 26, 06 @ 5:25 pm: Hey Chin, tell us how you really feel, man. Just kidding. The Skilling/Filan analogy is actually quite appropriate. ENRON called it “mark to market accounting” and Filan has called it several different things; in the pension area I think the phrase was “proportional savings” or something like that. In both cases they were/are spending money that had not yet been earned yet. In the case of Filan & Co. whatever future savings was achieved by the pension changes made last year was more than offset by the cost of not paying for the State ERI now, when the savings are occurring, but instead paying for it over the next 40 years. Bill, I swear you are Becky Carroll. You trot out the same old tired crap that she does about “48% to 60%.” Let’s remind everyone how we got there. We (you) got there by borrowing $10 BILLION, giving Big Bob Kjellander an $800k fee along the way for his “advice,” (Fed investigation #2 for those who keep track) spending nearly a fourth of the money on current contributions instead of debt reduction, and then sending the payment book to the pension funds. Just when the pension funds had started to make some progress (by ignoring Filan’s “advice” to give all the money to his pals at Mesirow to invest in low-risk hedge funds) you sliced $2 billion out of their contributions for FY 06 and 07. My the time Blago’s term is over, net of the debt on those bonds, the pensions will be right back where they were in 2003 and not because they were bad investors or gave out too many benefits. Don’t believe me-believe the professionals at CoGFA. - Anonymous - Wednesday, Jul 26, 06 @ 5:44 pm: Yo, Lovie. You missed. The Gooburner’s plan is to not only fire all Republicans, but hire Democrats at 30-50% more the the Republicans were making. Then move the new hires from job to job with a corresponding 20-30% increase at each stop. And of course, give each other awards to show the mindless what a great job they are doing. For Democrats. - Lovie's Leather - Wednesday, Jul 26, 06 @ 6:21 pm: So, what you are saying Anonymous 5:44, Rod Blagojevich is essentially becoming a Huey P Long without any personality? Except Long fired Democrats that opposed him, instead of Republicans. - NoGiftsPlease - Wednesday, Jul 26, 06 @ 6:30 pm: When the people took early retirement, did the work they did go away? No, it did not. Combine the early retirement with the hiring freeze and you get a lot of consultant work (which, by the way, is a ripe area for political abuse). Oh, yea, and a lot of people who left state service went to consuting companies. So as far as I can see, it costs less in payroll expenses, but does it cost less in total to get the work done? - Downstater - Wednesday, Jul 26, 06 @ 6:38 pm: I would like to know how much taxpayer money went to Accenture and Bearingpoint for their consulting work on the never ending IT consolidation. This has been another prime example of inept leadership. - db - Wednesday, Jul 26, 06 @ 6:55 pm: Guv’s EO #10 consolidates state agency resources and facilities to CMS. Then CMS leases the same back to the agencies. Some agencies owned vehicles and buildings that they now have to lease to operate along with paying fees to CMS in order to have utilities maintained. All this goes back into the GRF. This is supposed to save money somehow, but seems to work more like money laundering. Another in a long line of budget reducing on paper initiatives that end up raping the taxpayers in practice. - Six Degrees of Separation - Wednesday, Jul 26, 06 @ 7:01 pm: For those who are interested, the state employees retirement system was funded at nearly 80% in 2001. Then a little thing like 9/11 happened and all the pension’s investments went south. Add the 2002 early retirement incentive and the 2 years of pension deferrals. If you take away those 3 things, I would not be surprised if we would be looking at 85-90% pension funding today (Numbers Guy or another budgetary expert could probably offer a more accurate assessment). One could call it a “perfect storm” that led to the balloon of pension obligations, and yet 2 out of the 3 events were within the control of those in power at the time. - 'The Gay Governor' - Wednesday, Jul 26, 06 @ 7:25 pm: AA, Good call on ‘Bill’ being Becky Carroll. It is not possible that anybody other than a Blago mouthpiece could: 1) So consistently recite, to the letter, the Blago message of the day, particularly when it comes to an obscure topic like state pensions, and, 2) Actually believe, or work so hard to show the world that he/she really does believe, that the governor is honest and that he is sincerely looking out for the best interest of ordinary Joes and Janes. Sorry Becky Carroll, it’s time for you to lose ‘Bill’ and find another nickname. - cynically anonymous - Wednesday, Jul 26, 06 @ 7:59 pm: Every time I hear/read that Rod has trimmed the state payroll and is thus saving the state money I want to scream. Has anyone checked to see how many people have been hired on contract? That may mean no benefit package per se, but if every contract employee is making 5, 10, 20, or 30 thousand more than their “payroll” counterparts, it’s hardly a cost savings - and the headcount isn’t really different - it just gets to be reported differently - typical Rod spin. And while I certainly realize that Ryan’s ERI cost WAY more than originally claimed, the wrong-doings of previous administrations are hardly a legitimate reason for continuing the pattern. No wonder he seems to have higher political ambition - he doesn’t want his children to be citizens of Illinois when the havoc he’s wreaking reaches its apex! - anon - Wednesday, Jul 26, 06 @ 8:07 pm: Six Degrees of Separation …911 has had little effect on pension performance since 2001. Take alook at other funds since oct 2002 and you’ll see the steady upwards climb that is just now peaking. Simple fact is that state employees make the contributions to their pension plans and politicians use it elsewhere. Edgar started to get the state back on track, Ryan broke it and Alphabet is screwing it. Where are the honest politicians that care??? - DuPage-Moderate - Wednesday, Jul 26, 06 @ 8:33 pm: I love it that for the last 16 years, legislators have raped the system and paid off orgainized labor groups to gain political favors leaving my generation to foot the bill. What a crime! I’m going to run for office on this platform….no more pensions. I’m abolishing them. What a travesty….and it is only going to get worse. The teachers and state employees are sucking the state dry. And no politicians have the testicular virility to stand up to them. - NumbersGuy - Wednesday, Jul 26, 06 @ 8:43 pm: Six Degrees, I’m no Schnorf by any means, but I can offer up a couple points of interest on this thread: -You’re correct that 9/11 (and the dot-com collapse that preceded it) plus ERI plus pension contribution cuts led to a big triple whammy, or “perfect storm” for SERS. In fact, John Filan himself used that precise term to describe the Stste’s fiscal condition as Blago took office in 2003. SERS, with the State Board of Investment as their “investor” lost about 15% of the fund between 2001 and 2003. The ERI added $2.4 billion to their unfunded liability, when it was supposed to cost only $600 million. It was to be paid off over 10 years at around $390 million per year. Blago & Co. never wanted to tackle the ERI problem. It seemed to be too easy to blame it on crooked old George. None of the pension bond money was targeted to specifically pay down this amount, so as TRS and SURS improved financially after the POB’s, SERS was worse off. Even in 2005, the “pension reform” bill more than doubled the cost of ERI by placing it on the 40 year credit card as AA notes above. -I think it’s not far off that SERS could have gotten back to its high point in funding by the end of the original ERI payback time in 2012 (10 years) if all funding commitments were kept and investment performance met the required return. OK, now I have a question-if Bill is Carroll, who is Reddbyrd? - Reformed - Wednesday, Jul 26, 06 @ 9:25 pm: It’s George Ryan’s fault….. - Six Degrees of Separation - Wednesday, Jul 26, 06 @ 9:33 pm: Correction- For the state employees retirement system, Net Assets as a % of Actuarial Liability reached a high of 81.7% in the fiscal year ended June 30, 2000 (FY 2000). It dropped to 65.8% in FY 2001 (dot-com bust), 53.7% in FY 2002 (post 9/11), 42.3% in FY 2003 (1st year of second early retirement), and hovered at about 54% the next 2 years. It will be interesting to see the funded ratio after the 2 years of “pension holiday” are fully accounted for. The “catch up” provision of state law requires additional payments to get to 90% funding by the year 2045. However, the law, passed in 1994, has already been softened by the legislature to allow for the the 2 year “holiday” in FY 2006 and 2007 where the catch-up payments were essentially skipped, thus requiring additional payments at a later date to make up the shortfall. Compounding the issue is that there are now more than 10,000 less employees paying into the system than there were in 2002. Saves payouts in the long run, but provides a weaker employee-to-retiree ratio in the short run, kinda like what is going on with Social Security. - Ignatius J. Reily - Wednesday, Jul 26, 06 @ 9:44 pm: The Twelve Tables: “If he shall have done an inuria let there be a penalty of twenty-five.” Gellius, Noctes Atticae XX, I 13: “There was a certain L. Veratius, a terrible nuisance and fearfully irresponsible. He used to take delight in slapping the faces of free men with the palm of his hand, and he went around followed by a servant with a purss of asses, and when he had slapped a man he would order twenty-five asses to be paid out on the spot.” Might be time to collect…… - state worker A - Wednesday, Jul 26, 06 @ 9:53 pm: I agree with ‘cynically anonymous 7:59 post’. There are consultants sitting inside state buildings, doing the work that state employees use to do, but making a lot more. In addition, they get cost of living raises and merit raises. When you put it all together they are raking the system. In addition, the real headcount is a joke. While actual workers have not been replace when former employees retired or quit, there have been sooooo many ‘newly created positions’ that it will make your head spin. We have middle managers with assistants (this does not include their normal staff of 3-5 full time regular employees). Our administration manager is currently on his third assistant – it seems after six months they amazingly find a more permanent position that is covered by the teamsters union. - Six Degrees of Separation - Wednesday, Jul 26, 06 @ 9:54 pm: Of course, the pension investment board could always have a couple bang-up years with their investments, which is really the biggest wild card in the system’s health; or, a massive infusion of ca$h could happen with a sell-off of state assets. - Concern Citizen - Wednesday, Jul 26, 06 @ 10:03 pm: All smoking mirrors. IS little Judy and better? Maybe not but taxpayers are ready for a change, or at least I hope sooooooooooooooo - Curt Mercadante - Wednesday, Jul 26, 06 @ 10:06 pm: Unfortunately, the newspapers are reporting on this — but nobody will hold Blago or our legislature accountable. Illinois has become a national embarassment. National employers look on our state with disdain. (The Chicago City Council doesn’t help matters.) - Anony - Wednesday, Jul 26, 06 @ 10:28 pm: Just a reminder– It was George Ryan who saw that the state was headed into financial trouble after September 11th threw our economy in the tank and created an early retirement to save the state money. That is what cut the headcount down, not Blagojevich. I want to puke whenever he talks about cutting the state payroll. - steve schnorf - Wednesday, Jul 26, 06 @ 11:00 pm: This isn’t analysis, just fact. If the state powers that be had been willing to hold state spending growth (except for pension payments) at zero each of the past three years, our current circumstances would be much different. We would be on schedule on our pension payment ramp-up to 90% funded, a positive. The medicaid payment backlog would be even larger, a negative. There would have been no increases in el and sec education funding, probably an actual decrease-a negative, from my viewpoint. There would be no new universal pre-school, no AllKids, no new nothing; whether this is a positive or negative depends on your perspective. There would have been extensive cuts in other state agencies, almost certainly more than have happened in the current scenario. This is now opinion. I think that no GA could have passed those budgets. If we Republicans were still in charge, I don’t think we could have. If you remember, we were unable to pass the cut-back budget the Governor asked for Memorial Day 2002: we had to accomplish it by passing a higher budget, veto it back by hundreds of million of dollars, and depend on the Senate Republicans to hold those vetoes. I’m not defending what has happened over the past 3 1/2 years, I’m simply saying the Governor had to choose from available alternatives, not make- believe ones. He probably did inherit the perfect storm, and his no-tax pledge took away any chance of a safe harbor to seek shelter in. Why do you think there were no Republican alternatives offered to the Governor’s budgets? A big reason is the only two choices would have been to propose very large cuts in the budgets the Governor proposed, earning the enemity of almost every interest group, with no hope of passing them, or to propose tax increases. One isn’t smart, and the other didn’t make sense under the circumstances; the Governor had sworn he would veto tax increases. - Anonymous - Wednesday, Jul 26, 06 @ 11:00 pm: Illinois doesn’t have a budget deficit. People with journalism degrees who know zip about finance are using terms they don’t understand. The Illinois Constitution requires a balanced budget in fact. Can’t have a deficit with a balanced budget by definition. If people want to know what a REAL deficit is, please see Topinka’s friend Dennis Hastert who has made deficit spending on the Federal level an art form. The Federal Gov’t runs a huge deficit every year, Illinois state gov doesn’t. - steve schnorf - Wednesday, Jul 26, 06 @ 11:16 pm: Yes, anonymous, we do have a budget deficit. It is structural, meaning base spending is growing faster than base revenues, and therefore, the deficit is growing. We are papering over it each year right now by using one-time revenue sources (pension payment deferrals, fund sweeps, sales of assets, underfunding medicaid by growing amounts each year, thereby increasing the payment cycle, etc), in effect, eating our seed corn, to use an old downstate saying. This Governor did not create the problem, but in all honesty he has not fixed it, either. I used to tell groups there were only three ways to deal with budget imbalances; cut spending, raise revenues, or play “let’s pretend”. All three have been used to some degree or another by every administration within my memory. Too many of the things we are doing right now fall into the latter category, but worse than that, we seem unwilling to admit to ourselves that we are doing it. - Six Degrees of Separation - Thursday, Jul 27, 06 @ 12:08 am: Anon 11:00- Many of people commenting here know a hell of a lot about the state budget, if you didn’t know, and are not journalists. I agree the federal budget is more out of whack than the state’s, but 1) it’s mainly a difference of scale and semantics, and with similar structural issues in each, and 2) the topic here is state finances. - NumbersGuy - Thursday, Jul 27, 06 @ 12:27 am: 11:00 anon, no wonder you wouldn’t sign your name to that bunch of nonsense. Steve is spot-on in both of his posts. Illinois is nowhere close to a balanced budget. Although Blago didn’t created it, he’s done zip-o to fix it and the endless obfuscation about fiscal matters in general has complicated a solution. Six Degrees also reminds us of two important points about SERS and pension funding generally. SERS’ decreasing ratio of active, contribution members to retirees is not generally a sign of a healthy fund. TRS and SURS are around 2 to 1, TRS trending slightly up, SURS slightly down. SERS is almost down to one active fpr each retiree. Ideally, the ratio should be around 3 to 1. SD’s other point is also of special note here. The investment earnings of the funds are there largest source of funding (60-65%), with member contributions next (17-20%) and the State approp making up the balance. When approps get cut, the investment earninga bwcome even more crucial. What most folks don’t realize is that since the Blago folks took it over, the State inveatment Board has ranked dead last for 4 years in a row in investment performance of the State pension systems. TRS is in first place and SURS is second. The underperformance also contributes to the funding woes of the systems they invest for. That’s enough for a night. This pension stuff even makes me tired. - Reddbyrd - Thursday, Jul 27, 06 @ 8:17 am: Think how tired pension talk makes the voters who are trying keep their self funded retirement plans above water while watching the haters and handwringers worried about their guaranteed sweet deals. Think how the United employees are worried about their pensions that just got buried in some federal hole. Seem unlikely most will worry about how to get the state pensions 100% funded right now. It also seems very unlikely that anyone will see Jydy Bore as the rescue ranger on this one. - Bill - Thursday, Jul 27, 06 @ 8:28 am: The voters care about health care, education, and public safety and holding the line on taxes. Governor Blagojevich has made great strides in these and other areas and on election day the voters will elect him to continue to improve the quality of life for everyday people. - Cassandra - Thursday, Jul 27, 06 @ 8:32 am: I’m sure that whenever JBT says state pension crisis, the average taxpayer tunes out. Too boring. What might get people revved up is the tab for state employee health care, which must be officially calculated and planned for, according to a change in public accounting rules, very soon. This informations clarifies the huge inequities between state employees and the citizens who pay their salaries. Illinois is an againg Midwest state demographically and health care costs will become increasingly important as the aging trend continues. Instead of carping about Allkids, JBT should be putting forth plans to provide all Illinoisians with health care. If we are going to borrow from the pension fund, why not borrow for that. Illinois lacks both guaranteed issue and community rating, linchpins of a modern system. Every Illinois adult, employed or not, regardless of income or pre-existing conditions, should have access to health insurance. Far more important than maintaining a huge, undereducated and underworked state government bureaucracy, for example. - Anonymous - Thursday, Jul 27, 06 @ 8:57 am: I love when people throw in words like “structural,” like that’s really supposed to signal a crisis. If Illinois has a deficit then it’s violating the Illinois Constitution. So where’s Lisa Madigan? Some of you just need to admit that your hate obsession with Blago blinds you to reality. - VanillaMan - Thursday, Jul 27, 06 @ 9:02 am: Get real. NO one cares about this issue except state workers. I don’t care how much finger pointing there is, how unfair it is, or how it impacts some bozo’s retirement. All the sniveling and whining I have read so far doesn’t make me care one fig. You people need to bring it home to voters in a way that they understand that their biscuits will get smoked if the situation isn’t fixed. So far, all I read is miserable crying. That’s not going to fix anything. Start thinking - why should voters care? Then get a simple version of it out. I suspect this cannot be done, or it would have been done already. State workers are not respected by voters. Understand this and start considering ways to make this reality work for you. - steve schnorf - Thursday, Jul 27, 06 @ 9:09 am: I certainly don’t hate Governor Blagojevich. I like much of his agenda, including stem cell research, expanded pre-school subsidies, and incresed funding for elementary and secondary education. I’m simply trying to bring some measure of reality-based perspective to the budget discussion. - Anony - Thursday, Jul 27, 06 @ 9:31 am: Reddbyrd - I just love how your post DOES NOT mention how wrong Blago and the Democrats are with their budgets, but rather that you are depending on it being too complicated/boring for the voters to understand. Way to be a leader there, bud! That’s just the type of people we want running the State of Illinois! - Downstater - Thursday, Jul 27, 06 @ 9:59 am: There is a simple solution to this problem and it is to stop creating programs when their is no revenue to support them. One time fixes do not address the problem of large deficits. With the state in this bad of shape financially after only 3 1/2 years of the administration, think where we will be four years from now if Blago is reelected. That to me is quite a chilling thought. - NumbersGuy - Thursday, Jul 27, 06 @ 10:07 am: VM, I agree with your posts most of the time but I beg to differ on this one. I believe that “more than State workers” care about the possibility, or likelihood that they will face a tax increase someday to pay for the decades of pension underfunding. Maybe I’m off base, but I also feel that most voters do respect State troopers, highway maintainers, prison guards, schoolteachers, college instructors, and many others that receive a State supported pension. - SilverBackDemocrat - Thursday, Jul 27, 06 @ 11:06 am: The state pension system is truly a structural proplem. Nonetheless, Governor Blagojevich has taken steps in the right direction to fix the system (albeit there is more to do); in fact, the Gov. has instituted policies for new state employees- under the new pension system, new state employees will have a pension plan that is similar to the private sectors 401k’s (it was a hard sell because of the unions “AFSCME”). Former Governor Ryan’s buyout plan was a quick-fix that has and is going to have catastrophic effects to the pension plan in the present and in years to come. I for one am a state employee, glad to be a state employee, work very hard, and do a good job for the people of this state. I will get a retirement pension (check) from the old system (2.5% for each year of state employment). When I am 50 years old with 20 years of employment, I can retire and receive 50% of my wages until I die (can’t beat that!); approximately $35,000 a year for the rest of my life, just because I happened to work for the state of Illinois. I don’t know too many companies that can afford to pay that kind of money to people who worked for them for 20 years (and no-longer work for them for the rest of their life’s). That my friends is why the pensions are so expensive. In addition, AFSCME’s contract for coucil 31 received a “19% increase” under their last contract, so it has an effect on pensions, etc. There is a lot of blame to go around, but at least the Gov. did something to slow the pension explosion. There is still some more to do, but it is hard to get folks to agree on anything these days, let alone on a comprehensive pension plan. - steve schnorf - Thursday, Jul 27, 06 @ 11:50 am: No, there isn’t any simple fix to this problem. Without any new programs, expenditures would still be growing faster than revenues, mainly because of medicaid, education, and pension contributions.. - Six Degrees of Separation - Thursday, Jul 27, 06 @ 12:27 pm: Silver Back- I wasn’t aware of any new “defined contribution” 401k-type pension plan for the state that has been legislated or even proposed in legislation. Cite? - Reddbyrd - Thursday, Jul 27, 06 @ 12:40 pm: ANONY nICE - Just the facts - Thursday, Jul 27, 06 @ 12:43 pm: First - While SilverBack may be a state employee, he does not have the same pension benefits as the overwhelming majority of state employees. He must have one of the jobs that is covered by the enhanced pension benefits that were originally designed for law enforcement officers and were extended to cover other folks like highway maintainers who were also determined to have dangerous jobs. The average state employee pension is calculated based upon 1.67% times the years of service times the average of the highest 4 years of the last 10 years of salary. In addition, the average state employee may retire upon reaching the “rule of 85″ (age plus years of state service reach 85) or at age 60. I wanted to clarify this before Cassandra chimes in with her usual rant about state employee pensions etc. ad nauseum. Second, I believe SilverBack is also incorrect when he asserts that new employees will have some type of 401(k) type plan in lieu of the traditional pension. This may have been a proposal at one time, but I am unaware that this was ever enacted into law. Third, I would be interested in any comments Schnorf may have about how and why the Ryan administration missed the mark by such a wide margin in calculating the impact of the early retirement. If my understanding is correct, Schnorf’s Bureau of the Budget would have been involved in determining the estimated cost of program. Fourth, SilverBack’s statement that the current Governor did something to slow the “pension explosion” is patent nonsense. The very limited “tweaks” to the system passed by the General Assembly and signed by the Governor, for which the Governor and the General Assembly take credit, are akin to giving the passengers of the Titanic buckets and telling them to start bailing. Yea, it can be considered action to fight the sinking of the ship, but it’s way too little and ultimately has no appreciable effect. - Little Egypt - Thursday, Jul 27, 06 @ 1:27 pm: SilverBackDem - I would encourage you to go ahead and retire from the state with 20 years experience at age 50 and draw that $35K per year pension. It will be very difficult for you to live on it though. Then go find a job at your age that will pay you the additional $35K you just lost by retiring. Your chances are slim to none because people like hiring the younger crowd for a wee bit less money. If this is your situation, then you should be very concerned that your $35K will be there for you for the “rest of your life” because with the debt this GoverNOT has placed on the pension system, you will be lucky if it does not go belly up in the future. I have paid my money into this system, just like I would expect to with any other job I had. Just because I was a State employee should I be deprived of what is mine? I don’t back up to collect my State pension check and neither should anyone else. I say shame on each and every legislator who voted for raiding this pension system TWO YEARS IN A ROW. I still say, roll the legislative, judicial and executive branch pension system into SERS and see how often they would raid it. To all State employees, don’t you be one bit ashamed of who you work for and the job you are doing. You have taken a lot of criticism by many people by being “a State worker”, but if there were no State workers, we would have no license plates, no hunting license, no FOID cards, no State income tax refund checks, and a whole host of other services that directly depend on a State employee somewhere doing their job. I’m really sick of people thinking State employees have it easy. These people are working with little or no raises, have had to kick into their retirement more (and sometimes into someone’s political campaign), and have seen their work environment erode by having their workload doubled because of Blogo’s layoffs and hiring freeze and because of the political hacks that show up one day and say “where is my office”, only to do absolutely NO work and be seen a couple of times a month. Those, dear friends, are the people who should back up to get their paychecks. Not the tried and true State employees. Pingback IlliniPundit.com » Blog Archive » More on Illinois’ Pension Debt - Thursday, Jul 27, 06 @ 3:36 pm: […] (Hat tip: Capitol Fax) […] - Arthur Andersen - Thursday, Jul 27, 06 @ 4:57 pm: Good afternoon, Becky, er, Bill. I see you’ve brought a colleague or two to the discussion. We accountants get all atwitter when the facts are distorted, so let’s straighten out a couple: -Egypt, the pension systems for legislators and judges, though separately organized (and with better benefits) are part of the State Retirement Systems. They are actually (because of the better benefits) the lowest-funded of the five State systems. The “executive branch,” excluding the Constiutional Officers who are members of the GA system, are all members of SERS. FWIW, the Judges and GA systems were cut around 15% in 06 and 07 while the larger systems took cuts closer to 50%. In fairness, their approps are much smaller and they had no “reforms” that would affect their contributions. -Silverback is wrong about a “new pension program.” The 401k/DC option has been floated a few times and never gets any traction. The employees don’t want it and it doesn’t save any money. As Rich noted when he posted this and as I wrote yesterday, Blago’s failure to pay for ERI when the bill came due wiped out any positive effect his other changes may have had. - steve schnorf - Thursday, Jul 27, 06 @ 10:03 pm: Facts, That’s a legitimate question, and I don’t know all the answers, but I’ll be happy to tell you what I do know. Obviously when the new numbers were put out, I was surprised and tried to do as much checking as I could as an outsider. First, I have been told by legislators and staff in various parts of government that one thing that made a difference is that the systems calculated the numbers on a different basis than we did. I have been told that they calculated the entire cost of the pensions of early retirees. We calculated the new costs, since the real costs created by ERI were in our opinion only the difference between what retirees would draw in the years before they would have otherwise retired and what they otherwise would have drawn anyway. Ergo, if some one retired at 55 who could have otherwise retired at 60, we used the cost of those 5 years plus the runout of those costs. If that information is correct, it probably accounts for a billion or more of the difference. Second, about 50% more people retired than we anticipated. We used the number of people eligible times the rate of retirement experience suggested to us by the systems. That’s probably the second largest piece of the cost difference. Third, there were some extra provisions added at the end to the model as we had proposed and evaluated it. That probably accounts for the next largest piece, but I’ve never had enough info to try to put a number on it. All that said, we missed it big time. We involved the systems, the four caucus staff, and others in our deliberations, but we still missed it big time. - Little Egypt - Friday, Jul 28, 06 @ 9:45 am: Arthur Anderson - thank you for the clarification. However, if this pension system goes belly up, it won’t be the retired legislator who will lose benefits first. It will be the average retired state employee. The GA will find a way around it so that they still get their money. They have always looked out for themselves first. Sorry, comments for this post are now closed.