Limit runaway pension payouts

The state of Illinois wants to balance its annual operating budget, then it must deal with the tremendous growth in pension liability.

The state employees, policemen, firemen, teachers, and other state pension programs are unsustainable. The problem is the overly generous benefits promised which exceed the state’s ability to properly fund. Some will argue that it is the result of underfunding by the state, and that is only part of the problem.

The major problem is the exponential growth in liabilities related to these hefty plans. As an example, according to the Illinois Taxpayer Education Foundation, there are 17 Illinois State Police employees retired at age 50 with pensions greater than $100,000 per year that is subject to a 3-percent annual salary adjustment. These individuals will receive more than $5 million in pension payments over their 31-year life expectancy against their $200,000 contributions. A private sector employee in the Social Security system earning the same salary as the cop and retires at age 62, will receive $22,000 per year against a contribution of $150,000. The state police persons will receive $4,370,000 or 800 percent more.

The pension programs, if continued, should offer a payout based on the amount the individual and state contributes, not a certain fixed amount such as 75 percent of final salary. The final dollar amount accumulated in the plan would be used to purchase an annuity. The more the individual contributes, the greater the annuity. Another option would be the Social Security system and 401(k) plans. The Illinois taxpayers have been asked to pay more taxes to help support these outrageous pension plans. Indeed, it is time for all of us taxpayers to ask for and expect action from our state lawmakers.

Ron Fuchs

St. Charles