Delay legislator pay until they fix pensions

Illinois issued $3.7 billion in pension obligation bonds at yields of up to 5.877 percent for eight-year maturities in February. The Wall Street Journal Feb. 24 caption was “Illinois bond sale gets done at a cost.”

You could get a 30-year fixed rate home mortgage for 4.9 percent, yet due to the state’s poor credit Illinois taxpayers have to pay 20 percent higher rates for shorter term debt. The proceeds covered the annual contribution to our public employees’ generous retirement systems.

Financing annual pension contributions with long term debt is unsustainable and will invariably lead to the state’s insolvency.

Our elected representatives aware of the pension reform problem began to focus on a legislative solution after the February financing fiasco. They developed three options for current public employees’ future services. One, they could opt for the traditional defined benefit plan with higher employee contributions to support the generous traditional defined benefit plan. Two, they could participate along with new hires in a revised defined benefit plan that offers less generous defined benefits while being credited for all benefits earned under their prior plan. Three, they could participate in a new self-managed plan with employer and employee contributions of 6 percent each, similar to a private sector 401(k) defined contribution plan.

Like the Bulls, our legislators could not deliver near the end of the game. Once again they decided to kick the can down the road to the fall veto session. Who suffers? Illinois taxpayers and employers who continue to bear the costs of delay while taxpayers become increasing subservient to our public servants.

Legislators, you let us down. You did not do what you are paid to do. What we need is a bill to delay our legislators pay until pension reform is passed to improve Illinois’ perilous financial condition.

Mike Tennis

Sleepy Hollow