Opinion

Pension plans that can't be sustained

Posted May 19, 2015 12:01 am

The Illinois Supreme Court decision to strike down the 2013 pension law coupled with the recent decision that post-retirement health benefits are protected and guaranteed by the Illinois Constitution does not provide direction on what needs to be done.

The unions now have no reason whatsoever to negotiate any reduction to the pension and health care benefits guaranteed by the Constitution. Illinois has the largest and ever increasing $111 billion unfunded pension liability and multibillion unfunded health care liability. These liabilities are simply unsustainable for the current and future taxpayers of Illinois.

Pension plan costs already consume 21 percent of the current budget and the percent will increase significantly in future years stifling economic growth, further cutting education funding for students and drastic reductions in programs for the poor and elderly. The court's decision that the Illinois Constitution precludes any "diminishment or impairment" dooms any future negotiated changes because some group will successfully claim the change to be a "diminishment or impairment."

Illinois taxpayers cannot afford further uncertainty for months or years on pension negotiations while the unfunded liability grows to $120 billion or higher.

Businesses act to terminate defined benefit pension plans when they become unsustainable and offered different types of plans. Like a business, elected officials in Illinois have the power and fiduciary responsibility to taxpayers to terminate its currently unsustainable pension plans and be liable only for accumulated benefits not future benefits. Failure to terminate the current pension plans guarantees significant future income tax increases for all Illinois taxpayers, including businesses.

As an Illinois taxpayer, I look to the governor and my Senate and House representatives to demonstrate the leadership needed to terminate the unsustainable defined benefit pension plans.

Howard Snyder

Wheaton

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