Work for a sustainable, affordable pension fix
The news this week wasn't surprising, but it should be alarming.
Illinois had the worst pension funding shortfall for state workers in the nation in fiscal 2009, a study by the Pew Center on the States showed.
According to The Associated Press, many experts recommend states save at least 80 percent of the amount they'll need to meet pension obligations, but Illinois had only 51 percent. A $79 billion gap existed at that moment in time between assets saved and long-term costs.
The economic collapse hasn't helped, but it's long been documented that the problem grew over many years when legislators delayed pension payments or took out loans to make them.
The time for placing blame has past. State workers deserve a solution so they know they will have retirement security. Taxpayers deserve a solution that doesn't require repeated tax hits like the one approved in January. We all have a vested interest in and obligation to fix this unsustainable system.
Last spring, in a stunning, one-day display of political power and discipline, majority Democrats led legislators to approve significant changes to the pension benefits plan for new state workers who joined the payroll at the start of this year.
That was a good first step. Now it's time for the second one.
There have been refreshing signs of collaboration and seriousness of purpose in Springfield this session. A few weeks ago, Democrats, Republicans and teachers union leaders stood together to announce agreement on a bill that would make strikes tougher and allow more consideration of performance over seniority when layoffs must occur.
House Republican Leader Tom Cross of Oswego reminded us this week that he and Democratic House Speaker Michael J. Madigan have been working well together on broad budget parameters and more pension changes.
We strongly urge that that cooperation continue. We strongly urge Gov. Pat Quinn and Democrats and Republicans from both the House and Senate work together along with state worker union representatives and agree to a workable system of pension changes that will significantly address the funding gap for all state workers.
Cross and other suburban Republicans have a plan that would allow workers to collect what they've already earned. With future earnings, they would have to elect to either stay in the traditional system and contribute more, move into the system created last year for new hires, or move into a self-managed, 401(k)-styled plan that would require no more than a six percent state match to an employee's similar pension payment. This concept seems sound because it gives state workers choices. It seems legal and workable because it applies only to future earnings. And it starts to move public workers toward a more affordable plan that starts to mirror what most private workers use.
Cross suggests such changes would boost pension funding to 90 percent by 2045. We don't know whether that's so, or whether this is the best possible option. It seems more than a fine start.
What we do know is that we can't afford any more 67 percent income tax increases to pay for past mistakes. What we do know is that doing nothing can no longer be an option.
We urge all the parties to get together now with that seriousness of purpose and hammer out some real changes. Changes that they -- and all state workers -- can abide. Changes that we -- all the taxpayers -- can afford.