* Finke…
State pension contributions will increase by $291 million in the fiscal year that begins July 1, a much smaller increase than the state faced in its current fiscal year.
The figure was reported Thursday by the General Assembly’s Commission on Government Forecasting and Accountability, which annually reviews the certified contributions Illinois’ five state-funded pension systems say are required. […]
The commission said the contributions to the pension systems in fiscal year 2017 will total $7.9 billion. That’s an increase of $291 million from the current year.
The increase is substantially less than the $681 million increase in pension contributions that were required this year. It is also substantially lower than the nearly $1 billion annual increases seen in 2013 and 2014.
We are very near the top of the ramp.
* But the unfunded liability is still growing…
A state legislative report says Illinois’ unfunded pension liability is $111 billion.
The General Assembly’s Commission on Government Forecasting and Accountability listed the figure in a Thursday report. It covers five pension systems for the fiscal year that ended June 30.
The report comes as legislative leaders and Gov. Bruce Rauner have agreed to take another look at overhauling pensions. The Illinois Supreme Court rejected a previous plan lawmakers said would save the state billions in contributions.
That’s a $6.4 billion increase from last year.
- PublicServant - Friday, Dec 11, 15 @ 10:26 am:
You can thank the pension ramp for the increased amount due the pension funds as Rich points out. As for the revelation that the unfunded liability is still growing, that’s what happens when you borrow from the actuarially-required contributions over 6 decades that would have otherwise been earning money through investment.
- walker - Friday, Dec 11, 15 @ 10:29 am:
If only Quinn’s predecessors were as responsible.
Sorry Rich, but when somene says up is down, you know you’re in the political world. LOL
- Jack Stephens - Friday, Dec 11, 15 @ 10:31 am:
Sorry for double post. Just a concerned Illinois citizen here….
- Almost the Weekend - Friday, Dec 11, 15 @ 10:31 am:
Thanks Jim Edgar! It’s stunning to me how he has been given a pass on this, while the media blames Madigan for it.
- AC - Friday, Dec 11, 15 @ 10:33 am:
It doesn’t matter what the courts say, or that we’re near the top of the pension ramp, they’ll still recycle pension reform, before payments start dropping and the crisis is over. If they want it to survive a constitutional challenge, they’ll make it truly voluntary, and offer people money to voluntarily move from Tier 1 to Tier 2 that they’re tempted to take it. Some would gladly trade their future retirement security for a boat, car, or college money for their kids. If we were fiscally responsible, we’d not decrease our pension payments, even when, if we followed the ramp, the payment would decrease.
- Big Joe - Friday, Dec 11, 15 @ 10:34 am:
All they had to do was make the required pension payments on time and not skip any to add new programs. If they added new programs, then taxes should have been increased to pay for them. Do that and we would not be having these “pension crises”. But NO, we just added things that cost money, and never increased incoming revenue to pay for them. If common folk did that, they would be up the creek, just like our state is now.
- Norseman - Friday, Dec 11, 15 @ 10:35 am:
=== The report comes as legislative leaders and Gov. Bruce Rauner have agreed to take another look at overhauling pensions. ===
Yep, lets waste more time finding unconstitutional ways to stick it to current employees. Refinance and lower annual payouts.
- Six Degrees of Separation - Friday, Dec 11, 15 @ 10:46 am:
I have a feeling that the pols of this state will keep tilting at the obligatory “pension reform” windmill as a political dodge, until the balance of Tier 1 to Tier 2 employees, and the hump of the ramp, is on a downward slope and they can say “we were unable to reform anything, but things are getting better anyway, so no need to bother now”. I agree that just re-setting everything like the desired funded ratio and the payout period to inflict minimal damage would be a preferable course.
- Had Enough - Friday, Dec 11, 15 @ 10:51 am:
=== The report comes as legislative leaders and Gov. Bruce Rauner have agreed to take another look at overhauling pensions. ===
Other than find a funding source to pay for the current pension plan, readjust the ramp, make it a choice to move to tier 2, what other legal solution is there?
- Sue - Friday, Dec 11, 15 @ 10:52 am:
Big Joe- yea and had George W not invaded Iraq, we would all be better off as well. Illinois has to deal with its pension funding based on the facts ” on the ground” and the reality is there is no way absent a massive tax increase for the State to be able to fund a 111 billion liability growing faster then state revenues and still have $$ to fund other spending needs.. Given the Supreme Court ruling and as irreponsible as it might seem- the State should get back to a 5 percent tax rate fund the pensions as best as possible and deal with the inability to pay when the day arrives and force the parties to some type of restructuring. There is no incentive for the unions to concede given court decisions and there is no reason to even try to fund the past liabilities. The ramp will allow a slow death and when the balances are depleted maybe the public sector will come around.
- AnonymousOne - Friday, Dec 11, 15 @ 11:14 am:
There are no adults in the room when it comes to meeting pension responsibilities. Everyone got their reduced taxes and free lunch courtesy of public employees (pensions) and now they’re whining because the bill has come due. And to top it off, they blame those they stole from. A collective deep breath is needed, admission of skating by on someone else’s money and we all need to pay up. The business of cheating public employees out of their retirement future by conning them into taking less is just more devious behavior—the kind financial criminals practice all the time. Man up and pay up.
- jdcolombo - Friday, Dec 11, 15 @ 11:14 am:
I suspect the opinion in the current Chicago pension case will contain language that will make it even more difficult for any “pension reform” package that isn’t completely voluntary for employees. Of course, even that might not dissuade folks bent on a political show, as opposed to realistic solutions.
- Crispy Critter - Friday, Dec 11, 15 @ 11:15 am:
” - The ramp will allow a slow death and when the balances are depleted maybe the public sector will come around. - ”
Then the money for retirees pay comes from the general fund as required by the constitution. The State must pay this debt on way or another, the sooner they realize that the better off they will be.
- nixit71 - Friday, Dec 11, 15 @ 11:21 am:
==A state legislative report says Illinois’ unfunded pension liability is $111 billion.==
What about the other elephant in the benefits room…retiree healthcare benefits? How much do we owe there?
- Anonymous - Friday, Dec 11, 15 @ 11:50 am:
“- Sue - Friday, Dec 11, 15 @ 10:52 am:”
We should just take your whole salary and net worth since you want to rob my wife and her fellow employees.
- Apocalypse Now - Friday, Dec 11, 15 @ 12:08 pm:
Yes, Nadigan has the answer higher state income taxes. Hmmm! Nothing from his Democratic legislators on his comments. I guess, Madigan is pretty confident about not losing an seats in the house in 2016, as he paints a bulls eye on caucus members.
- Greg, Retired State Employee - Friday, Dec 11, 15 @ 12:10 pm:
Clean up the Medicaid fraud, LINK Card abuse, and welfare for illegal immigrants health care Illinois would have plenty of money, I love how the Democrats kept the welfare and lottery money flowing while we State Retirees have been waiting 6 or more months for health claims to be paid.
Lets how fast my comment is deleted.
- Bill White - Friday, Dec 11, 15 @ 12:17 pm:
@ApocalypseNow
There’s no reason for Democratic mushrooms to comment. It won’t be a Democrat who will file the tax increase bill in the General Assembly.
- Demoralized - Friday, Dec 11, 15 @ 12:20 pm:
==Madigan has the answer higher state income taxes==
Um, he also wants cuts. And the higher taxes and cut option is also reported by the Governor. So can your hyperpartisan nonsense that you spout all the time.
==Clean up the Medicaid fraud, LINK Card abuse, and welfare for illegal immigrants health care Illinois would have plenty of money==
Well, that’s a nice talking point but you really have no clue what you are talking about. Plenty of money? Give me a break.
==Lets how fast my comment is deleted.==
Stop being a victim.
- Demoralized - Friday, Dec 11, 15 @ 12:21 pm:
==And the higher taxes and cut option is also reported by the Governor==
Is also FAVORED by the Governor. Sheesh. Don’t know where my brain went there.
- Mason born - Friday, Dec 11, 15 @ 12:31 pm:
I hope proffesors are using this example to teach cost-benefit analysis. I can’t think of a better example of penny wise pound foolish. Or penny wise dollar foolish.
- Hit or Miss - Friday, Dec 11, 15 @ 12:51 pm:
Are the “State pension contributions” values listed including or excluding payments on some/all/none of the GO pension funding bonds of 2003, 2010, and 2011?
- Grandson of Man - Friday, Dec 11, 15 @ 1:04 pm:
It’s great to see pension costs going down. As far as paying down the unfunded liability, I support raising taxes on higher incomes. Pew released an analysis that shows the wealthy making great income gains today compared with 1971.
The middle class lost a lot since 1971, in the Pew study, which shows we need to strengthen and not erode labor protections.
- Jack Stephens - Friday, Dec 11, 15 @ 1:10 pm:
@grey:
Add draconian cuts to Welfate for the Wealthy to your list,
Thanx,
Jack
- Apocalypse Now - Friday, Dec 11, 15 @ 1:30 pm:
Take the time to read the General Assembly’s Commission on Government Forecasting and Accountability report. Adoption of a five year “smoothing” rate of return formula, just kicks the can down the road, again. Finke didn’t understand the impact of this change or didn’t want to report on it. Either way it’s lazy reporting.
- Name/Nickname/Anon - Friday, Dec 11, 15 @ 1:40 pm:
==Adoption of a five year “smoothing” rate of return formula, just kicks the can down the road, again. ==
This is a change? I think it is a continuation of the same practice, and it does not kick the can down the road unless you know what investment returns will look like for the next 5 years.
- Almost the Weekend - Friday, Dec 11, 15 @ 2:59 pm:
-Greg Retired State Employee-
Some people think Tier 1 Pensions and 3% COL is an excellent example of welfare abuse, that the taxpayers of Illinois are forced to pay.
The biggest loser out of this are Tier 2 employees, get out while you can. If you are a recent state hire (since 2011) who have a background in finance, engineering, and IT; get out.
- HangingOn - Friday, Dec 11, 15 @ 3:16 pm:
==Some people think==
And some people also think it’s alright to take from the pension funds and not be expected to pay up when it’s due. And from what my old manager told me the 3% was a deal that the workers actually paid extra into their pension to get. I think he’d said he either paid an extra .5% or extra 1% every paycheck for that. So, if you want to pull that you need to repay every penny they invested in it over the course of their employment. That would probably come to a good chunk of change overall.