34 Comments - Norseman - Monday, Aug 29, 22 @ 1:10 pm: Has someone stolen Batinick’s identity? If he keeps talking like this, he may find himself branded a RINO by the MAGA GOP. - Big Dipper - Monday, Aug 29, 22 @ 1:11 pm: Kudos for saying this. - Second Chance - Monday, Aug 29, 22 @ 1:13 pm: Wish the Bat would pull a Jordan and announce his comeback. - TheInvisibleMan - Monday, Aug 29, 22 @ 1:13 pm: This is exactly why I never trusted anything Batinick said. He has always known this. He’s not stupid. But until he decided to no longer run for his house seat again, the language used was always ‘death-spiral’, insinuating the pension amounts would be larger shares of the budget every year until it consumed more than the entire budget - because that’s what a death spiral is. Shaw Newspaper guest column by Jack Frank and Mark Batinick. Spetember 15, 2015. “Illinois must do so if we are ever to get out of the fiscal death spiral we are engulfed in.” He also liked to say Chicago finances are in a death spiral. I get it, I really do. I know why he said the things he did. Why he did the things he did. That’s also why I wouldn’t give his words any attention today. - Oswego Willy - Monday, Aug 29, 22 @ 1:14 pm: Does this make Batinick a Poindexter or not? Statehouse Chick would know, but now the movie critic can decide. As an aside, the Batinick yard sign, one of my all time faves. - City Zen - Monday, Aug 29, 22 @ 1:15 pm: ==MORE expensive than what Tier 2 costs the state== Today. ==We peaked at 29.4% in 2017== Understandable as that was the final (half) year of the 3.75% rate before it went to 5%, so the budget would have been smaller with the ever increasing pension payments consuming a larger percentage of the budget. But Mark was against the 2017 tax hike. So he’s now saying that was a good thing? - JS Mill - Monday, Aug 29, 22 @ 1:41 pm: =Understandable as that was the final (half) year of the 3.75% rate before it went to 5%, so the budget would have been smaller with the ever increasing pension payments consuming a larger percentage of the budget.= What? Man, you had to go pretty far down the rabbit hole to get to that lame rationalization. We ran the race faster because we had a faster car, but if we did not have the faster care the percentage of time would have been more because we would have been in a slower car. =But Mark was against the 2017 tax hike. So he’s now saying that was a good thing?= Yes. Smart people are saying that too. - Obamas Puppy - Monday, Aug 29, 22 @ 1:45 pm: Thank you Mark - Anyone Remember - Monday, Aug 29, 22 @ 1:55 pm: When people talk about “fixing the local government pension problem” … what they’re really saying is they’re going after firefighters and police officers (Chicago & Cook County not included here). Other local government employees are IMRF, which is funded above 90%. - Grandson of Man - Monday, Aug 29, 22 @ 1:56 pm: “Also switching employees to Social Security and a 401K style retirement plan would be MORE expensive than what Tier 2 costs the state.” As we saw with the IPI and former governor, opposing a budget two years into his sabotage, debt and deficits don’t matter to them. Its that they despise paying for public employees to have decent jobs and protections - Commissar Gritty - Monday, Aug 29, 22 @ 2:03 pm: I’m having a hard time believing that anyone who still identifies as a Republican can be conscionable. Mark Batnick was one of the last few remaining R-pols that stopped me from throwing the party out with the bathwater. He’s a principled man who spoke and voted his conscience, rather than just spewing Tucker Carlson’s latest talking points about White Replacement Theory, or whatever. He’s retiring now, which is the last great move showing his integrity that he can make. I don’t know how anyone that actually cares about this country can call themselves a Republican right now. - TaxTheMemes - Monday, Aug 29, 22 @ 2:20 pm: Good points and a reminder of the impending brain drain in HGOP. No more Batinick, Bourne, Demmer soon… - Blue Dog - Monday, Aug 29, 22 @ 2:29 pm: JSMill. Just curious what your pension calculates at retirement. Comparatively, a good SS check plus a 401 distribution averages less than $60k. - Steve Reick - Monday, Aug 29, 22 @ 2:35 pm: Not to put a damper on this good news, but several things: This year’s better numbers come partially as a result of the massive infusion of Federal money due to COVID, and as Mark himself said a few months ago, that sugar rush is going to dissipate; The question isn’t one of the contribution as a percentage of the total budget, it’s a question of funding ratios. So long as we have a guaranteed 3% compounded COLA for Tier I, any decrease in investment return, from say, a recession, will once again widen the gap between assets and obligations. Admittedly, as the number of Tier I retirees goes down, that number should improve, but that’s going to take years and the economic cycle has a nasty habit of intervening; We’re still only making statutorily-mandated contributions, not the actuarially determined amount. Under the Edgar ramp, that number becomes a lot bigger before 2045, exceeding $40 billion. What percentage of the budget will it be then; TIER II employees are going to start retiring in greater numbers and we still aren’t clear on how the benefit levels stack up to Federal requirements. Have we tried to jump out of one hole only to land in another? - Arsenal - Monday, Aug 29, 22 @ 2:36 pm: ==Why would we do that?== Because the point was never actually the finances of the thing. The point was to punish workers. - cover - Monday, Aug 29, 22 @ 2:40 pm: = So long as we have a guaranteed 3% compounded COLA for Tier I = Do you propose to *reduce* this at a time when inflation is around 8%? Please feel free to introduce a bill to do that, so that Speaker Welch can give it the Century Club treatment. - Oswego Willy - Monday, Aug 29, 22 @ 2:50 pm: (Sigh) ===still only making=== Representative, with respect, It’s bad we’re making the payments? Seriously? It’s confusing to think that making the payments is a negative. Wouldn’t *not* making payments be the bad thing? ===but that’s going to take years and the economic cycle has a nasty habit of intervening;=== If you have the lottery numbers, that’s be good too. The point of the Edgar Ramp exercise is to pay things down, and… ===Under the Edgar ramp, that number becomes a lot bigger before 2045, exceeding $40 billion. What percentage of the budget will it be then=== Legislators can try to look at the ramp and then look to offset when they can the obligation, and while you are citing that the payments are being made, and you could make a point that the structure of the budget could change that, did you vote for the budget this fiscal year? Here’s your chance to defend the vote(s) no matter how you fell. I’ll let you address that in full. All said, I’m grateful, Representative, you commenting, and having a discussion towards this post, Representative Batinick’s own thoughts, etc. OW - Steve Reick - Monday, Aug 29, 22 @ 3:02 pm: @cover: No, but we had a good run of years when the 3% compounded number exceeded the rate of inflation. Are you willing to give that back? @OW: Obviously, we should make the payments. But if they’re insufficient to fully fund future benefits, we’re only kidding ourselves. I don’t have the lottery numbers, but that’s what we’re counting on if we think that we’ll ever get to the 90% funding target. As to the budget, no I did not, but that’s a topic that needs its own space. - Regarding Article 3 and 4s - Monday, Aug 29, 22 @ 3:12 pm: When will someone promote legislation to require municipalities to make full payments to local police and fire pensions, just like IMRF? The difference in funding levels is directly related to required employer contributions. Too many municipal league members have gotten away with skipped or reduced payments to local pension funds with no accountability for decades. And how many municipalities have done nothing or very little regarding the 2040 deadline, except demand more time? Employees pay in every paycheck. - Big Dipper - Monday, Aug 29, 22 @ 3:21 pm: ==TIER II employees are going to start retiring in greater numbers= They raised the retirement age to 67 so any that retire anytime soon will have few years of service and thus small pensions. - Anyone Remember - Monday, Aug 29, 22 @ 3:39 pm: ===They raised the retirement age to 67 so any that retire anytime soon will have few years of service and thus small pensions.=== The first group of Tier 2 employees to reach 35 years will be in 2046, the year after the Jim Edgar Pension Ramp ends. As Tier 2 sprang from the minds of Michael Madigan (graduate of Notre Dame) and David Vaught (graduate of West Point), does anyone think that is a coincidence?? - Oswego Willy - Monday, Aug 29, 22 @ 3:48 pm: === But if they’re insufficient to fully fund future benefits, we’re only kidding ourselves.=== Representative, have payments for retirees or payments towards the liability not been made? === we think that we’ll ever get to the 90% funding target.=== At any given time, should the holder of my mortgage think I can pay 90% of the home off if I’m making the payments to fulfill to debt obligation? Don’t get me wrong, I don’t think how this railroad is running is efficient, but looking at the idea of what needs to be done with retirees ad those whom own the liability, including the state holding the bag, reimagining how to restructure that isn’t kicking the can down the road seems the thoughtful way? === no I did not=== That will suffice. Hope you’re well, stay dry, this weather is crazy. I appreciate, truly, your time to respond. If I get the lottery numbers first, between us, I’ll share them with you. OW - JS Mill - Monday, Aug 29, 22 @ 4:01 pm: =JSMill. Just curious what your pension calculates at retirement. Comparatively, a good SS check plus a 401 distribution averages less than $60k.= Well, since you tried to make this personal maybe you could write me a check for all of the SSI contributions that I made before I went into education. I maxed out my last three years. I will never get and increase like SSI recipients will get this year either. And of course ANYONE that wants to can try and earn a Professional Educator License, we are all hiring. My pension is going to be fairly decent if I retire at 64. Short of that it is reduced because I got into this business late. So I have a long way to go to get to 64 and don’t know what my pay will be. But a friend of mine who worked in the private sector just retired early and his 401k is pretty sweet. And he will make more than $60k per year when SSI kicks in so maybe that person who is making $60k on SSI and 401k should have made an effort to do better for themselves instead of whining about it. - Steve Reick - Monday, Aug 29, 22 @ 4:17 pm: ===Representative, have payments for retirees or payments towards the liability not been made?=== No, but I’m thinking of years down the road. Sooner or later, those chickens are going to come home to roost. ===At any given time, should the holder of my mortgage think I can pay 90% of the home off if I’m making the payments to fulfill to debt obligation?=== Apples and oranges. Your mortgage has an amortization schedule that reaches full payment on a date certain. The pension ramp’s target was 90%, and the amortization for reaching the target was something less than it should have been to reach that target (statutory vs. actuarial contributions). That being said, the ramp was what politicians came up with to make the pain less at the front end with greater pain at the back end. Should we have issued bonds and played the arbitrage game? In retrospect, maybe so. But we have to deal with the situation as it is, not as we see it through the lens of the past. - Oswego Willy - Monday, Aug 29, 22 @ 4:32 pm: === Your mortgage has an amortization schedule that reaches full payment on a date certain. The pension ramp’s target was 90%, and the amortization for reaching the target was something less than it should have been to reach that target (statutory vs. actuarial contributions).=== My point is exactly what you answered before this; === Sooner or later, those chickens are going to come home to roost.=== There’s this imminent collapse that isn’t true that you point out in response to my comment. The similarities to a mortgage, the long term goals to get where things are, like mortgage debt, you point out the “Sooner or later” *is* the reality. Not the way to run a railroad, but where Illinois is, even bond ratings are going up, even though the raters seemingly misunderstood debt and Illinois’ own responsibilities toward it. I’d also turn to your colleague… === In terms of % of our budget our total pension payment is past the hump and decreasing. We peaked at 29.4% in 2017. We are at 23.2% this year and scheduled to be at 22.9% next year. … There is more work to be done on local pensions I’ll admit. But it’s best to work with real data not talking points=== What makes that thoughtful is truly our discussion here. Even if it’s only you and I reading each other’s thoughts, the idea of the “sooner or later”, the work now is not that the sky is falling but repairing what can be construed to fix the roof before there’s rain. === Should we have issued bonds and played the arbitrage game? In retrospect, maybe so. But we have to deal with the situation as it is, not as we see it through the lens of the past.=== Probably MOST true, but not my, or your, call. That has long past. Thank you for your insight. OW - JS Mill - Monday, Aug 29, 22 @ 4:40 pm: @Steve Reick, I will give you credit for coming here and making your point. The fact is that the pension funds never have to hit 90% of obligations. The industry number is closer to 70%. For all of your negativity, the funding amount as a percent of obligations, has slightly improved over the last 52 years since the adoption of the constitution in 1970 when the pension protection clause was passed. Thankfully. So the idea that we have to get to 90% is faulty. The idea that there will be some economic downturn that sends us into pension oblivion is hilarious since we have, in just the last 15 years, had two major economic upheavals and yet pension funding remains steady. Bottom line, keep paying the bill. Tier II has already substantially lowered the annual cost of the pension system. The AAI is guaranteed (thank Jim Thompson) and Tier 1 annuitants have an iron clad contract. You are welcome for all of our very hard work. - Oswego Willy - Monday, Aug 29, 22 @ 4:45 pm: === I will give you credit for coming here and making your point.=== “Same”, big props, Representative. Thank you. - Steve Reick - Monday, Aug 29, 22 @ 5:00 pm: ===For all of your negativity=== I prefer to call it clear-eyed reasoning, but let’s not quibble. - JS Mill - Monday, Aug 29, 22 @ 5:55 pm: =I prefer to call it clear-eyed reasoning, but let’s not quibble.= If that be so, I wonder why you have not commented on the enduring stability of the pension funding? 50 plus years and all number of financial calamity and we now sit at 46% funded. I will grant that more is better, and now we move to the last 23 years of the ramp. The overall fund balances will rise. - Blue Dog - Monday, Aug 29, 22 @ 6:14 pm: JSMill. Good for you on having a great pension. Over 122,000 Illinois retirees bring home over 100k/ yr. a 3% raise on that number is much better than an 8%on a $30k SS benefit. And guess what. Of that 122,000, 1/2 also get SS. That’s where the angst comes from. - Oswego Willy - Monday, Aug 29, 22 @ 6:16 pm: === That’s where the angst comes from.=== Life choices make for angst. You had a choice, others made a choice. Some might say that “angst” is jealousy. Jealousy is not a good look - Fivegreenleaves - Monday, Aug 29, 22 @ 8:15 pm: The tier 2 benefit will have to be sweetened by 2027, otherwise it will not meet the social security benchmark, and will be in violation of Federal law. - G'Kar - Monday, Aug 29, 22 @ 11:15 pm: Since we are speaking of pensions, it seems to me that Tier II was designed to keep teachers from ever collecting much of one. Assuming you are a recent college graduate at 21 or 22 and apply for a teaching job. You would have to work over 40 years until you would be even eligible for a pension at age 62. But, to get a full pension, you would have to teach until 67, or over 45 years. If you retire at 62 your would lose 30% of your pension, according to the TRS website. Do you really want to teach 2nd graders for 45 years? No wonder few and fewer college students want to go into teaching. - NotNotAStateEmployee - Tuesday, Aug 30, 22 @ 8:34 am: G’Kar, I think you are only partly right. Tier II pensions only require 10 years of service. You only get the full benefit of what the formula indicates at 67, with the half-percent decrease per month before then — for the maximum 30 percent that you indicate, if you retire at 62. However, if you teach for 10 years and then leave state employment for another job, you don’t “lose” anything. In other words, you don’t have to work at the state until 67 — you just can’t claim the full pension until then. You can work your ten years and then go off and do something else, and file for your retirement at 67. Sorry, comments for this post are now closed.