Cost-of-living impact unconvincing
Let me start by saying what I agree with in your Dec. 28, editorial on pension COLAs. I agree with, "... all of us will have to share the cost of cleaning up Illinois' pension mess ... sadly, it includes teachers and other public employees, who unlike the legislature have met their payment obligations over the years."
However, your analysis of the COLA impact was unconvincing. First, the biggest risk to a retiree is inflation; that will eat away financial security faster than anything else. Second, the example you provided was not compelling. It showed that over 22 years the difference between the 3 percent COLA and real inflation rate was less than $5,000. By the way, where did you come up with an annual pension of $65,000 per year? You used an average, and this average is skewed by the higher amounts in the data set.
The median is more representative of what a typical person receives. Do a quick search of U.S. income statistics and you'll find the median is the value reported most often.
Third, COLAs are an easy target now given the inflation rate is at historical lows. What happens in 5 or 10 years when inflation increases and looks like the 13 percent we experienced in 1980? Will the Daily Herald be writing editorials saying what a shame it is to have seniors living in the streets because they can't afford bare necessities?
The Illinois pension system, as designed with its 3 percent COLA, helps ensure seniors can live a dignified life. If we must change it, then tie the COLA to an inflation metric like Social Security does. If that's not enough, then let's pay more now while we're younger versus in retirement when we are more vulnerable and dependent.