Tuesday, April 02, 2013

Illinois Pension Reform and HB3303

A good post from the Homer Lockport Tea Party om IL HB3303,

Virtually everyone agrees that Illinois needs to do something about its massive unfunded pension liabilities, which total more than $200 billion. For too long, politicians have been all too willing to kick the can down the road and let the problem build and build, rather than confronting it with meaningful reform.

Now, several pension reform plans have emerged, but most of them have included little more than changes to the current system. With enough pressure having finally built up to make changes to the state's pension system, now is the time for lawmakers to stand for comprehensive, lasting reform.

Lawmakers should oppose any pension plan that leaves the outdated defined benefit plan in place and instead support shifting public employees to a defined contribution, 401(k) style retirement plan, like what is seen in the private sector.

Here are the facts:

• Illinois needs a defined contribution, not a defined benefit, plan for its retirees. This is the only solution that will ensure that taxpayers are not left on the hook to make up the difference when investment returns (which defined-benefit systems are dependent on) inevitably fall short of projections.
• A defined benefit system (especially one that includes a funding guarantee) will – in the years to come – require annual payments from the state so large that lawmakers will either have to increase taxes or significantly cut funding for core government services, like education and public safety. Neither should be acceptable.

Action Plan:

  • Using Illinois Opportunity Project website Contact your State Representative*
  • Using Illinois Opportunity Project website Contact Governor Quinn*
  • Participate in our conference call with co-sponsor Rep. Ives - April 7th at 7:00pm (Call in details to follow)
  • Join the Illinois Opportunity Project Facebook Team (friend Danielle Rowe on Facebook and ask to part of the team), and meet with your legislator (training and education will be provide by IOP)
*Using the website will allow us to influence legislation, track results, and quantify the impact we are having. We will be able to demonstrate the influence the grassroots effort is having with individual legislators and make our voice count.

More Information:


Anonymous said...

Like all the right-wingers supporting abandoning the pension plan in favor of some kind of defined contribution plan, you overlook the fundamental difference between public and private pension. Public pensions in most cases replace, rather than suppplementing, social security. A defined contribution plan leaves the person open to the possibility of his investments failing and leaving him with nothing to live. You also overlook the matter of the Constitutional guarantee that pensions will not be diminished.

Anonymous said...

As Ben Stein and Phil DeMuth state in their many investment books "401Ks have been an unmitigated disaster for the American Public". This is due primarily to the notoriously poor choices and high expense ratios. The entire concept of a defined benefit program is to combine and pool all participants for greater leverage on investments, something impossible with individual 401Ks. This "group effort" also costs taxpayers considerably less over time. One only needs to look at the amazing yields TRS has recorded over many decades saving on costs. Please remember, educators held up their portion of the contract by providing services to the children of Illinois. Now lawmakers need to stop misappropriating the money sent from the paychecks of educators for future pensions and honor fully the agreement like adults.

Gexton said...

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