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Health & Fitness

What Real Pension Reform Would Look Like

Unfortunately, the recently passed pension reform bill followed the usual template of implementing superficial fiscal savings while granting unions new powers to resist real reform.  This law took us a step backward by putting pension payments ahead of all other spending and giving the unions the right to sue the State if the pension fund isn't topped off in a timely manner.  Our politicians just delegated management of the pension crisis to the courts. 

 

Here's how it will work.  Springfield will continue to spend beyond our means and continue making unsustainable promises to the unions.  The pensions will not be funded by our representatives, which will lead to a court battle where the judges will order the politicians to raise taxes to comply with the law, and our politicians will be able to say "We never voted to raise your taxes!  Not one of us did!  We would NEVER do that!  The judges made us do it!".  It's the usual Machiavellian corruption we see in Illinois every day, elevated to an art form where we can simultaneously admire the genius of those who are cheating us while wallowing in disgust at what it means for our future.  But we can't spend all day in the Illinois Museum of Political Corruption, so let's step outside, suck in a bracing breath of freezing fresh Chicago air, and consider what real reform would have looked like.

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Here's a prioritized list of real pension reforms:

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1. The Constitutional amendment preventing pensions from being diminished is still in place.  Until this is repealled, Illinois is in a Detroit death spiral.  Repeal this amendment.

 

2.  Stop end-of-career salary spiking which boosts retiring State employee's salaries by 25% or more over the last four years of work for the sole purpose of artificially increasing base pension payments.  They can not claim to have put in enough money to cover this dramatic increase in pension so they can not claim to have "earned" all of their pension.  This scam accounts for around 25% of the current liability.  This is where pension reform should START, but of course priority number 1 keeps this from happening.  Nothing should occur until all pensions are rolled bach to where they would have been without the spiking.  No one can defend this policy, but mysteriously no one attacks it.

 

3.  Dump the whole program onto the unions' laps and let them take ownership of it.  If everyone is putting in enough money to justify their benefits, then it should be sustainable without any more of our tax dollars, right?  If it were really sustainable then why aren't the union people screaming to get it out of the hands of the politicians who've proven they can't manage a lemonade stand, and demand to get control so Springfield can't mess it up?  Let that one sink in for a minute.

 

4.  Put all new employees into a 401k style plan and get rid of all defined benefit programs.  The only way to guarantee benefits to one person in an uncertain world is to enslave someone else to pay for it. Get the taxpayers off the hook for their neighbor's retirement.  The recently passed law gives employees the option to do this, but doesn't force them to do it.

 

5.  Stengthen school boards.  By law schoool board members can not rally their constituents against union overreach during negotiations, while union leaders have the right to communicate with their members, organize strikes and protests, and behave in ways that otherwise would be unlawful.  This puts school boards, already amateurs up against seasoned union pros, in a very weak bargaining position where it's impossible to rally the community against outrageous union demands.

 

6.  Switch to Social Security standards.  Raise the retirement age to whatever the age is for Soc Sec, and limit all benefits to whatever calculation is used for Soc Sec benefits.  If we're going to enslave the next generation to pay for our comfortable retirements, then at least we should all play by the same corrupt rules.

 

Any one of these would go a long way toward saving Illinois' finances.  Although the situation looks dim, and the specter of Detroit looms large, there is still some hope.  In my next post I'll reveal what you can do as a powerless citizen to help turn Illinois around.


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