In Illinois the pension crisis may be even worse than initially feared. The state legislature is finally beginning to look for solutions, but a new letter released by the Civic Committee of the Commercial Club suggests that the system can’t be salvaged. The group does recommend some drastic changes, but warns that many promised benefits will inevitably go unpaid. Chicago Business reports:
Specifically, the committee wants lawmakers to do four things: eliminate all cost-of-living increases for retirees or future retirees, cap pensions to a maximum salary, increase the retirement age to 67 and shift the cost of teacher pensions to local school districts over a 12-year period. The state now pays all teacher pensions except in Chicago, where city taxpayers pick up the tab.Doing so will “minimize the long-term damage” that already has been done, Mr. Fahner says in his memo. “Unless each (of the four) is approved, nothing else legislators say or do will matter.”Nonetheless, he adds, “it is no longer possible to preserve all state pension benefits as currently structured.”
The state’s unions and pensioners object that they have been paying into the system for years, while the state government has repeatedly failed to put up its share of the funds. Now, they say, the state is looking to break its promises to them as a result of its own fiscal incompetence. They do have a point, but there’s no getting around the simple reality that the money simply isn’t there. Promises that can’t be kept, won’t be.