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Old 12-20-2011, 08:56 PM   #21
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I am wondering, about what percent of their pay did the Illinoise teachers have to contribute to their pension over the last 30 years?
Pretty substantial, according to the article.........
Stacey Gottlieb, 40, a social worker at Cyd Lash Academy in Gages Lake, and her husband, Neil Mott, 37, a Rolling Meadows High School chemistry teacher and chess and tennis coach, have contributed 9% of their salaries to TRS for a combined 23 years. (Local school districts contribute an additional 2.5% of the fund's annual income.)
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Old 12-20-2011, 09:32 PM   #22
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Originally Posted by jazz4cash

Pretty substantial, according to the article.........
Stacey Gottlieb, 40, a social worker at Cyd Lash Academy in Gages Lake, and her husband, Neil Mott, 37, a Rolling Meadows High School chemistry teacher and chess and tennis coach, have contributed 9% of their salaries to TRS for a combined 23 years. (Local school districts contribute an additional 2.5% of the fund's annual income.)
Its easy to see the funding problem and why its under 50% funded. Teachers pay 9% , school 2.5%, and the rest in up to whims of the government to contribute the needed difference. Across the river in MO., it is funded by 14.5% teacher and 14.5% district directly each month, with no money funded directly by the government and it is about 90% funded.
Illinois appears to have a 2.3 multiplier for 31 years for teachers, MO has 2.55 multiplier at 31. Illinois retirement ave. was $43 k from what I read and about $42k in MO. I am not offended and understand why people advocate the elimination of pensions, (my loving GF of 5 years who works in the "real world" doesnt think I should have one and we get along just fine ) But if you are going to have one either FUND IT CORRECTLY (as in Illinois's case 11.5% combined contribution rate aint gonna get it done) or eliminate it. Dont play games and have people pay in their whole life and get caught with nothing. Thats my opinion FWIW.
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Old 12-20-2011, 09:58 PM   #23
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Its easy to see the funding problem and why its under 50% funded. Teachers pay 9% , school 2.5%, and the rest in up to whims of the government to contribute the needed difference. Across the river in MO., it is funded by 14.5% teacher and 14.5% district directly each month, with no money funded directly by the government and it is about 90% funded.
Illinois appears to have a 2.3 multiplier for 31 years for teachers, MO has 2.55 multiplier at 31. Illinois retirement ave. was $43 k from what I read and about $42k in MO. I am not offended and understand why people advocate the elimination of pensions, (my loving GF of 5 years who works in the "real world" doesnt think I should have one and we get along just fine ) But if you are going to have one either FUND IT CORRECTLY (as in Illinois's case 11.5% combined contribution rate aint gonna get it done) or eliminate it. Dont play games and have people pay in their whole life and get caught with nothing. Thats my opinion FWIW.
+1

My calculation show that the combined contribution for a typical state/local government pension (2-3% * number of years) requires a combined 25-35% contribution. So Missouri is right in line with that number and obviously ILL isn't. It is virtually impossible for a private sector to retire before 65 (using just retirement funds) unless they contribute 12.5% and get a 4-6% match

IMO state employee should be contributing 12.5% of their salary (1/2 the minimum contribution.) to their pensions. . In most cases they are paying less, typically 8%. When it comes time to figure who pays for the unfunded pensions taxpayers, current workers, new workers, and retirees. I think the difference between 12.5% and their actual contribution should be factored into what is fair distribution of the pain.
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Old 12-20-2011, 10:49 PM   #24
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+1

My calculation show that the combined contribution for a typical state/local government pension (2-3% * number of years) requires a combined 25-35% contribution. So Missouri is right in line with that number and obviously ILL isn't. It is virtually impossible for a private sector to retire before 65 (using just retirement funds) unless they contribute 12.5% and get a 4-6% match

IMO state employee should be contributing 12.5% of their salary (1/2 the minimum contribution.) to their pensions. . In most cases they are paying less, typically 8%. When it comes time to figure who pays for the unfunded pensions taxpayers, current workers, new workers, and retirees. I think the difference between 12.5% and their actual contribution should be factored into what is fair distribution of the pain.
I must admit, I wasnt too versed in the numbers game of funding a pension until I started learning from the forum here. Even though my pension has 29% annual contibution rate of salary this still is only about 40 cents on the dollar needed in retirement for my system. The rest is coming from the assumed 8% annual returns on investments. Many lay people contributing 8% like you mentioned clifp, probably assume thats a bunch of money that is paying for the pension when in reality it isnt. With 60% of a pension check depending on 8% returns, I can definitely see ERD's point as that 60% portion in theory is a potential tax payer liability even if its funded actuarially correct. As we know the market on average returns x% but in reality, it guarantees nothing, maybe less than nothing!
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Old 12-20-2011, 11:13 PM   #25
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Illinois should have taken a hint from states that handled their pensions problems sooner and better. But, given the level of corruption at the state level..... well, they have the best government money can buy!
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Old 12-21-2011, 07:12 AM   #26
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Illinois should have taken a hint from states that handled their pensions problems sooner and better. But, given the level of corruption at the state level..... well, they have the best government money can buy!
+1, I think that sums it up pretty well.

As to making Joe taxpayer liable just because they voted Joe representative into office doesn't seem totally fair to me, as its hard for me to remember a time when a politician ever did the bidding of the people, so why should the taxpayers be on the hook? Lesson learned, when malfeasance takes place, everyone suffers.
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