Difference between secure and lavish
I believe the Senate Democrats failed to properly represent all their constituents when they rejected the public employee pension cutting plan. They stated the plan was unfair and illegal. The state constitution has promised teachers and state workers a secure retirement.
There is a big difference between secure and lavish. The pension programs promised by Illinois legislators are ridiculous. The benefits promised by these plans are not sustainable. As an example, a teacher can retire after 37 years with 75 percent of their base pay with a salary contribution of 9.2 percent which covers their retirement and health benefits. Assuming a final salary of $100,000, that would qualify an individual to a $75,000 annual pension with a 3 percent cost of living allowance applied each year. The pension amount will grow to $100,800 in just 10 years and double in 20 years.
The argument the pensioners put forth, is the pension plans would be in good shape if the state had made their contributions on a regular basis. That is partially true. However, if the state had made regular contribution they would still have a shortage because the state could not consistently earn the financial returns necessary to fund retiree benefits with the consistent annual 3 percent COLA. The Democrats have to forget about buying their re-elections and represent all their constituents.
If the legislature does not take action, then I believe there are several possible outcomes. The state will raise taxes of all kinds, essential services will be eliminated and/or the state will go bankrupt. What will happen to the pension plans with bankruptcy?