|
 Gov. J.B Pritzker defended his record on pensions
in a candidate questionnaire with the Chicago Tribune, giving a dismal outlook
on pension reform.
“There are no silver bullet solutions that address the pension mistakes made by
previous officeholders over the last few decades, and it’s important to
recognize that the state is obligated to pay retirees what they are owed,”
Pritzker said.
True, there is no such thing as a silver bullet. But constitutional pension
reform – which Pritzker has routinely ignored – is the only real path toward
protecting the funds from insolvency in the long term.
A “hold harmless” pension reform plan developed by the Illinois Policy Institute
would save the state $2.4 billion in the first year and more than $50 billion by
2045. It would fully eliminate pension debt in that time while preserving all
promised benefits to public employees for work already performed.
Pritzker claims his fiscal policy has done more than enough to address the
state’s pension crisis.
“That’s why we are using this year’s budget surplus to pay down pension debt
beyond the required amount, we have expanded the pension discounted buyout
program, and we are achieving long-term investment returns in excess of the
long-term targets,” he said.
Pritzker is referring to an analysis from Segal, an actuarial firm that
estimated the state’s pension debt decreased by $14 billion last year to $130
billion.
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Another estimate from Moody’s Investors Service puts the total debt at $317
billion. Even with the lower estimate, Illinois still has more pension debt than
any state.
What Pritzker fails mention, however, is the report’s conclusion recommending
overhauling Illinois’ pension polices.
“(T)he funding plan under (Public Act) 88-0593 produces employer (State)
contributions that are actuarially insufficient, meaning if all other actuarial
assumptions are met, unfunded liabilities will still increase due to the State
contributing an amount that is not sufficient to stop the growth in the unfunded
liability,” the report states.
Essentially, the one-year reduction is far from a trend, and only pension reform
can reduce Illinois’ pension debt long-term. Segal recommends a 100% pension
funding target instead of the current 90% goal.
When asked about a pension reform referendum amending the state constitution,
Pritzker shut down the idea of leaving it up to voters.
“There’s more work to do on pensions but paying what we owe and using the tools
currently available to us, as described above, are making a difference in
addressing these challenges.”
If Pritzker trusts Segal’s math on pension debt, it means he should also trust
its recommendations for reform. |
