Lawmaker suggests different approach to payoff Illinois' pension debts
Send a link to a friend
[September 20, 2023]
By Andrew Hensel | The Center Square
(The Center Square) – A member of the Illinois House Personnel and
Pensions Committee is suggesting lawmakers may need to look at other
options if they hope to solve the state's pension crisis.
Illinois currently spends more than $10 billion a year on public
pensions, and the state's five systems have an unfunded liability of at
least $140 billion.
House Bill 4098, which has been the center of conversation during the
House Personnel and Pensions Committee hearings over the past few
months, would allow the Illinois Treasurer and Comptroller to transfer
$500 million from the General Revenue Fund to the Pension Unfunded
Liability Reduction Fund each fiscal year. Those funds would then be
used to make payments into the state's pension systems.
![](http://archives.lincolndailynews.com/2023/Sep/20/images/ads/current/bennet_lda_010722.png)
The committee's chair, state Rep. Stephanie Kifowit, D-Oswego, said this
is the right way to fix the pension crisis.
"This is the first time ever we have had a bill that discusses Tier 2 to
this depth," Kifowit told The Center Square in July. "This truly is
momentum going in the right direction."
Tier 2 pensions are for state employees hired after 2011. Stakeholders
say the fewer benefits compared to Tier 1 are problematic and could run
afoul of Social Security rules.
New to the House committee, state Rep. Martin McLaughlin, R-Barrington
Hills, believes HB4098 goes after the taxpayers instead of addressing
the unfunded liabilities.
[to top of second column]
|
![Illinois state Rep. Martin McLaughlin, R-Barrington Hills](../images/092023PIX/6440314fdea79.image_small.jpg)
Illinois state Rep. Martin McLaughlin, R-Barrington Hills - Greg
Bishop / The Center Square
![](http://archives.lincolndailynews.com/2023/Sep/20/images/ads/current/graue_lda_preowned_091823.jpg)
"Twenty-eight percent of our budget now goes to pensions when most
states are at 8%," McLaughlin told The Center Square. "What is our
solution? Move Tier 2 to Tier 1 and give them even more. So our solution
is to go after the taxpayers' wallet."
Private pensions restructured their pensions years ago, an approach
McLaughlin said legislators should consider but won't.
"They restructured their pensions 10 or 15 years ago. They restructured
them because they knew they were going to make sure they were going to
get paid is to keep underlying business solvent," McLaughlin said. "The
public pension plans have never, and they will not allow that
negotiation to take place. Their job [pension fund stakeholders] is to
make sure we can stay solvent, and the only way they believe they can
solve it is to constantly tax us. That is a recipe for disaster, which
is why everyone is leaving the state."
The state manages five pension funds. The Teachers' Retirement System
covers retired teachers from across the state, except for Chicago.
Combined with TRS, the State Universities Retirement System, the State
Employees' Retirement System, the Judges' Retirement System, and the
General Assembly Retirement System have an unfunded liability of at
least $140 billion. They are funded at only about 42% of what is needed.
The pension system for lawmakers is the worst-funded at approximately
19%.
![](http://archives.lincolndailynews.com/2023/Sep/20/images/ads/current/charrons_bch_2022.png) |