Pension benefits public employees and teachers in Illinois receive are "unaffordable" and "unsustainable," one candidate for state House in the 42nd District says.
"It's literally what's bankrupting the state of Illinois," Republican incumbent Jeanne Ives of Wheaton said.
Ives says pensions should be switched to a 401(k)-style system that allows more flexibility in transferring assets for employees and less pressure for taxpayers to pay up when the market doesn't hit investment targets.
The state should switch pensions to a system under which the employer contributes 7 percent of each worker's salary into a retirement account and the worker contributes 8 percent, adding up to a 15 percent tax-deferred savings, Ives said.
Ives' opponent as she seeks a third term representing the 42nd District, Democrat Kathleen Carrier of Carol Stream, says she opposes a 401(k)-style pension plan for state workers.
"You can talk to any person that was on a retirement plan through a 401(k) when the market crashed and where are they now?" Carrier said. "I don't think that's a good plan."
But Carrier, a 60-year-old seeking her first elected position, says she would need a "forensic examination" of state pensions before she could decide what's a better plan. The pension problem has developed during the past three decades, she said, so no one should expect any one state representative to immediately have the right solution.
"As far as what direction to go in, that's a good question," Carrier said. "'I'm not really sure I have a perfect answer."
Ives, a 51-year-old full-time state representative, said she's confident a 401(k)-style pension plan would be better than the state's current systems.
Ives said she's heard from constituents that the Teachers' Retirement System, for example, makes it difficult for teachers to leave one school district and transfer their pension savings to another.
"This is a very mobile society work-wise," Ives said. "They want the ability to move in and out of job, move to another state, follow their husband somewhere else, rather than being locked into a system."
A 401(k)-style plan would be more "flexible," she said, and would put less burden on communities to make up the difference when the market underperforms.
Ives and Carrier are competing in the Nov. 8 election to represent the 42nd District, which includes all or parts of Wheaton, Winfield, Carol Stream, Warrenville, Lisle, West Chicago, Naperville and Woodridge.