Leaders’ failures led to pension crisis

Leaders’ failures led to pension crisis

In his recent Fence Post letter, a Schaumburg resident proposed a solution to the state’s pension deficits: “Disperse the current pension monies into 401(k) accounts and let the account holders manage the funds.” Unfortunately, like most simple solutions to complex problems, there is a major flaw in this idea: Politicians from both parties have been borrowing the money that should now be in the pension funds.

When I was teaching, I was contributing 9.5 percent of my salary to the fund with the understanding that the state would be matching that contribution. This is similar to the obligation that employers have to match the contributions of employees who are covered by Social Security (which teachers are not). Our politicians, however, found it easier to use the state’s required contributions to cover up other problems in the state’s budget. It was easier to “borrow” the pension money than to balance the state’s budget through spending cuts or tax increases.

Now that the baby boom generation is retiring, those borrowed pension dollars must be repaid — principal and interest. That is why annual multibillion-dollar payments are now required. We incorrectly call this the “pension crisis” as if the pensions were the cause of the problem. It should be called the “integrity crisis” because it is the result of 30 years of deceptive budgets that did not honestly represent the state’s ongoing failures to meet its obligations.

These facts may not satisfy those who are angry that public employees are covered by these pension plans. Please keep in mind, however, that the citizens of Illinois would not now be facing a massive budget crisis if our political leaders had not been mismanaging the state’s finances for 30 years.

Jeff Huebner

Schaumburg