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RETIRING
AS EARLY AS AGE 50, SPRINGFIELD MUNICIPAL PENSIONERS BANK OVER $1M
Illinois Policy Institute/
Joe Kaiser
Among the 23 former city of Springfield
employees who retired at age 50, five have accumulated more than $1
million in pension benefits.
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 For many former local government employees enrolled in the
Illinois Municipal Retirement Fund, or IMRF, early retirement isn’t unusual.
But for five former city of Springfield employees who retired at just 50 years
old, that has also meant more than $1 million in total pension benefits.
In the last 20 years, 23 former Springfield employees retired at 50 years old,
according to IMRF records. The five retirees who have since become pension
millionaires each receive current annual payouts larger than the total amount
they contributed to IMRF over the course of their careers.
These retirees are only a handful of former city of Springfield employees who
have benefitted from overgenerous pension benefits. The city has 1,155 retired
employees enrolled in IMRF. Among them, eight collect annual pension payouts
greater than $100,000, and more than 50 have collected at least $1 million in
total retirement benefits over the course of their retirements, according to
IMRF records.
It’s not the fault of local government retirees that this
system is unaffordable for taxpayers. State lawmakers set the rules. But rising
property tax bills driven by growing pension costs are crushing Springfield
homeowners. While many municipal retirees benefit from overpromised pensions,
Springfield taxpayers are stuck with the bill.
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According to property data company ATTOM Data
Solutions, residents of Sangamon County – where Springfield is
located – paid an average effective property tax rate of 2.3 percent
in 2017. That’s nearly double the national average. For the typical
Springfield homeowner, those property tax dollars flow to 10
different units of local government, with the city being the
second-largest recipient. More than 11 percent of that homeowner’s
property tax bill went to the city in 2017, with 100 percent of
those funds going to pensions.
It’s a growing problem: Property taxes in Sangamon County have
increased by $446 per person over the last 20 years, adjusted for
inflation, outgrowing home values by 49 percent.
If the city’s high pension costs aren’t reined in, Springfield
homeowners can expect not only to see their property taxes continue
to increase, but more of those bills dedicated to pensions rather
than government services as well.
This system is not sustainable. For the benefit of taxpayers and
government workers alike, lawmakers should immediately implement
401(k)-style retirement plans for all new government workers. This
would provide relief to overburdened taxpayers and a more promising
future for government employees. In the long term, however, state
lawmakers must amend the Illinois Constitution to allow adjustments
to future, unearned benefits for government workers.
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