'Urgent need for change' in pensions

Your article "Illinois has nation's worst pension problem" provides a disturbing but accurate picture of the Illinois pension disaster. There is an urgent need for change and there is also a need to honor the commitments made to pension plan participants.

There are solutions and we need to act fast. The Boston College Center for Retirement Research published a report last year which was directed at fixing Social Security and there are some relevant solutions for new pension plan participants that would help fix our Illinois pension disaster. Solutions include freezing benefits on a sliding scale; changing the cost of living adjustment and raising the retirement age.

I am an independent financial adviser that specializes in retirement planning and I don't think many people know the actual cost of pensions for highly paid people. Last November the Daily Herald ran a series of stories on School Finance 101 and told the story of a 56-year-old Wheaton Warrenville superintendent who retired with an annual inflation adjusted pension of $214,248 in the first year, and increases of at least 3 percent each year for his entire life.

The actual cost of a $214,248 inflation adjusted pension is close to $10 million (which is the sum of the indexed pension payments for the school superintendent mentioned in your article until age 84). No one in the private sector has a pension plan that even comes close to this plan.

The Illinois Constitution defines pensions as a budget "mandate" but education and human services are only defined as a "priority". The unintended consequence is that with our rising pension deficit we will be unable to equitably fund schools and keep pace with the increasing need for human services. Another consequence is that we are placing an enormous financial burden on our children and their children.

Michael Knight

Libertyville