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Pritzker talks pensions

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Illinois

* From Brian Mackey’s interview with Gov. Pritzker…

Q: The pension liability still remains large and looming. Do you see any long-term changes that need to be made or or possible to make in that regard — beyond what’s already been done?

A: To be clear you can’t take care of your pension problem until you balance your budget, and we’ve been doing that. We’ve got to continue to balance our budget. This is not just a one time thing. Every year, we’ve got to make sure we’re actually paying the bills and balancing the budget. Then, in the wake of that, you can ask yourself: What should we do if we have surpluses? Should we put more money into our pension systems? Are there changes that we can make in the pension systems? I believe that if you paid into the pension system, and you were promised a pension, you should get that pension. The question is: How’s the state going to live up to that? And we’ve been slowly but surely increasing the percentage of funding of our pension system since I came into office. It’s been a goal of mine.

We increased a program that Mark Batinick, a Republican state representative, introduced before I came into office — that was a pilot program; I increased it to make sure that it’s open to everybody — and that’s to have your pension bought out by the state. You can get your money up front, and it’s less costly to the state. That’s just one of the things that we’re doing.

Getting better returns on our investments, making sure we’re consolidating as I did with police and fire pensions across the state. Seventy-five years people have tried to do that; I did it when I came into office, and it’s saving property taxpayers across the country across the state — and will save them — billions of dollars. So a lot of work that continues to be done on our pensions, both state and local, and we need to continue. But balancing the budget is the very first and most important thing you need to do.

* Yvette Shields at the Bond Buyer catches us up on the lawsuit to stop the state’s consolidation of those local public safety pension funds…

The unfunded liabilities of Illinois’ suburban and downstate public safety pensions rose to $13 billion in the last year of compiled results reported to the state, soaring over a 29-year climb that underscores the deep strains on local government budgets.

The funded health of the public safety pension funds has tumbled over the years. In 1991, the collective ratio was at 75.65% and peaked at 77.31% in 1999. The police funds ended 2019 at 54.98% and firefighters were at 54.35%. The health of some individual funds, however, are far weaker with ratios only in the teens. […]

Kane County Circuit Court Judge Robert K. Villa in a May ruling sided with the state in his long-awaited opinion saying he could not extend the term benefits beyond the reach of prior Illinois Supreme Court cases to find the challenged legislation unconstitutional against the Pension Clause’s protections.

The plaintiffs filed their opening brief Aug. 31 and the state’s is due Friday with the plaintiffs’ reply then due Oct. 21. The appellate court will then decide whether it will grant oral argument on the case.

The case could eventually land on the desk of the Illinois Supreme Court for the final word.

They just can’t let it go.

posted by Rich Miller
Thursday, Oct 6, 22 @ 1:23 pm

Comments

Have payments to retirees been missed?

What is the Edgar Ramp status going forward,

Explain Tier 2, maybe?

Comment by Oswego Willy Thursday, Oct 6, 22 @ 1:51 pm
Q: The pension liability still remains large and looming. Do you see any long-term changes that need to be made or or possible to make in that regard — beyond what’s already been done?

Question asked about changes that need to be made, not highlight what’s been done and stop taking credit for police pension consolidation until it actually happens and those localities see savings, which don’t do anything for the states pension issues…so the question needs to be asked again with an answer that addresses the question.

Comment by Rent free Thursday, Oct 6, 22 @ 2:04 pm
Higher than expected revenues have been a savior for this administration on pension liability. Although to the Governor’s ans his staff’s credit, they have done better managing the day to day cash flow. When revenues drop, is a GO issue in-place of GRF still on the table?

Comment by Dirty Red Thursday, Oct 6, 22 @ 2:07 pm
The gov is holding himself to a low bar on this issue. Yes, he has been much better than all of the horrible governors before him.

During a time of unprecedented economic growth and free federal cash, unfunded balances still go up. What happens when there is a major downturn?

Take all the cannabis money and redirect it at pensions. Put the gas tax to pensions.

Comment by Merica Thursday, Oct 6, 22 @ 2:15 pm
=== Question asked about changes that need to be made, not highlight what’s been done===
So the answer is no. You couldn’t figure that out?

Comment by Betty Draper’s cigarette Thursday, Oct 6, 22 @ 2:21 pm
That interview was the equivalent of a pillow fight.===Getting better returns on our investments, making sure we’re consolidating as I did with police and fire pensions across the state.===

What about the Martwick pension sweetener that you signed into law. It wasn’t even supported by the City of Chicago. Joke.

Comment by Boone's is Back Thursday, Oct 6, 22 @ 2:25 pm
===It wasn’t even supported by the City of Chicago===

Because the city wanted to continue not counting the benefits it gives out toward the unfunded liability.

Comment by Rich Miller Thursday, Oct 6, 22 @ 2:36 pm
As I near retirement age, I received an email last week indicating that I am eligible for a pension buyout.

I can easily understand how this would benefit the state.

However, I cannot imagine a scenario in which a buyout would benefit me and my wife in the long run. Why would I want to participate in a buyout? I would have to assume that the capital market is going to do well for the rest of my and my wife’s lives.

Comment by H-W Thursday, Oct 6, 22 @ 2:41 pm
= They just can’t let it go. =

Nothing about the police pension consolidation does anything to diminish benefits.

Those police pension fund boards were created pursuant to state law, and they could be abolished by a future state law, if legislators get tired of the obstructionists.

Comment by cover Thursday, Oct 6, 22 @ 2:44 pm
As I near retirement age, I received an email last week indicating that I am eligible for a pension buyout.

I can easily understand how this would benefit the state.

However, I cannot imagine a scenario in which a buyout would benefit me and my wife in the long run. Why would I want to participate in a buyout? I would have to assume that the capital market is going to do well for the rest of my and my wife’s lives.

Depends on age and buyout checks. I personally know some buyout checks 400k +… You could do ok with that in the market for 20 years on top of receiving a pension and maybe s s of you qualify.

Comment by Rent free Thursday, Oct 6, 22 @ 4:01 pm
As someone who has no pension can I buy into the state program . Much better deal

Comment by Early wynn Friday, Oct 7, 22 @ 4:25 am
As someone who has no pension can I buy into the state program . Much better deal

Sure if you can go be them 10 years,then you’ll be vested and eligible for 50% of healthcare for life…just for starters

Comment by Silky d Friday, Oct 7, 22 @ 7:47 am