When looking for solutions to our pension problems, it helps to be sure we know what weíre talking about. Pension payments have grown well beyond the traditional definition of retirement income. Retirement income typically starts when a person stops working, and in our society thatís generally 65 or older. Public pension payments generally begin a lot earlier, sometimes when public employees are in their early 50s. Thatís one reason pension costs are so high.
Another reason is that pensions are really just income with the payment put off until after the person retires. So the value of the pension should be looked at as part of the overall compensation, and we have to ask whether that compensation is reasonable and fair. On the basis of total compensation for teachers and other public employees; i.e. their working compensation plus their pension, itís already higher than the average taxpayer. Is that fair or reasonable?
Solving the pension funding problem should start with an evaluation of whether the current pensions are fair and reasonable to the citizens of Illinois, and if theyíre judged to be too high, then leaders must make the right decision.
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