Squeezy the Pension Python

[Chuckanut]

New IL state employees, hired in 2011 I think, are under a much more conservative plan. This will help 25-30 years from now, and helps very modestly now as less is needed to be contributed fund those future expenses.

Well, as my old grand pappy used to say, "The best time to plant a tree was 30 years ago, the next best time is today".

Interestingly, in my home state the pension plan with the biggest problem is the old one closed over 30 years ago. All those baby boomers in that system are now retiring. Still, I am certain the citizens of Illinois would trade their pension problems for ours in a New York minute.

 

[2B]

I know all teachers don't get such a deal, but I do have a hard time hearing about how teachers have it so tough. Please don't throw stones, I DID say that I know not all teachers get such a great deal. But a lot of them do.

The big pensions for teachers are in states/cities run by the public employee unions. Salaries are large and pensions wonderful. The only problem with this is the prospect of the next Detroit. Chicago is definitely having its issues.

I have a daughter that is a teacher in Texas. For working 9 months she is making about $50k. I have a sister with a teaching certificate in Washington State where teachers can bring in $80k+. The only problem is that there are so many want-to-be teachers that my sister can't get a teaching job. She's been a low paid teachers aide for many years.

 

[clifp]

Do you mean that a pensioner under this system gets 3% more every year regardless of the inflation rate?

Yup Hawaii has the same rule for its public pensions. Historically inflation has been in the 2% range other than 70s and early 80s when it was closer to 5%.

 

[NoiseBoy]

While I can't speak with certainty for the CPS pension system, the plan that I am a member of in Illinois has a 3% annual COLA. As far as I know that is for the life of the retiree.

 

[ERD50]

While I can't speak with certainty for the CPS pension system, the plan that I am a member of in Illinois has a 3% annual COLA. As far as I know that is for the life of the retiree.

I looked up my wife's plan (IMRF - Illinois Municipal Retirement Fund), she will get a small pension, and I was a little surprised to see that the 3% is non-compounding. The IMRF actually has decent funding (mid 80% IIRC).

-ERD50

 

[haha]

I have a sister with a teaching certificate in Washington State where teachers can bring in $80k+. The only problem is that there are so many want-to-be teachers that my sister can't get a teaching job. She's been a low paid teachers aide for many years.

Yet the union tell us that they just cannot get "qualified "teachers for less. Yeah, right.

Ha

 

[Gatordoc50]

Yet the union tell us that they just cannot get "qualified "teachers for less. Yeah, right.

Ha

And we are ranked 17th worldwide in education while spending way more than everyone else. Maybe we need an entity to ensure we are getting our money's worth like the insurance companies do for medicine. We would pay the third party and the teacher would get paid when Johnny is proficient with the fundamental theorem of calculus. The idea that someone gets paid regardless of whether they produce or not is just pure garbage. IMHO, of course.

 

[killingme]

DW has been in education for thirty years. As far as the pension goes, even some teachers, DW included, think that like an annuity, there could and should be a lifetime payment amount, but states and unions made tremendous promises of full funding, COLA, etc. which will probably all fail to be met. Also, I have to note, starting salary for teachers is abominable. You could do better waiting tables and not need a masters or sixth year.

 

[NoiseBoy]

I looked up my wife's plan (IMRF - Illinois Municipal Retirement Fund), she will get a small pension, and I was a little surprised to see that the 3% is non-compounding. The IMRF actually has decent funding (mid 80% IIRC).

-ERD50

From the SURS (State University Retirement System) FAQ -

Will I receive a cost of living increase on my retirement?
If you first began participation prior to January 1, 2011:
Each January 1st, your retirement annuity will automatically receive a 3% compounded increase. The first increase will begin on the January 1st following the month in which you retire and will be prorated for the number of months you were retired.

Here I believe "participation" means contributing to the system and not the date that you began receiving benefits. At least I hope so! Mind you, I would not object to a change to something more realistic such as CPI-U because I think that would make the system more viable over the long term.

What is a non-compounded COLA? I can't quite wrap my head around what that means.

 

[youbet]

Many folks on this thread are quoting numbers from the CPS system and then generalizing to the total Illinois pension problem. For example, while the Chicago BOE seems to have contributed 7% of the 9% employee contribution for the employee, this is NOT the case in the rest of the state. Typically, the employee contributes the entire 9%.

To reduce confusion, when throwing out CPS numbers, don't generalize those numbers to the rest of the state.

 

[youbet]

The IMRF actually has decent funding (mid 80% IIRC).

-ERD50

What a surprise! This is the system where most of the patronage workers and ghost employees reside. Naturally the politicians are going to fund the plan where their mistresses, kids, siblings, spouses, neighbors, bar buddies and Uncle Rod all are participants!

It's Illinois!

 

[youbet]

No one wants to see promises broken. -ERD50

Oh, I think somebody here does.........

 

[sunnysideup]

Some people think that government employees work for the public.

The reality is the reverse of that.

+1

I don't begrudge people their pensions but many public employees' are over the top and I do not want to pay for those underfunded pension programs.

 

[Fermion]

I don't begrudge people their pensions either, but they need to find the money somewhere else other than taxes. Maybe a fairy or something.

Nobody comes to rescue my 401K when the market drops 50%...well, ok technically the fed did, but in a roundabout way... I am not sure they will rescue it the same way next time.

But if we want to raise taxes to fund retirement plans, I am all for people putting some extra in my 401K!

 

[Chuckanut]

Nobody comes to rescue my 401K when the market drops 50%...well, ok technically the fed did, but in a roundabout way... I am not sure they will rescue it the same way next time.

Ummm.... didn't the market recover all it has lost? Unless a person panicked and sold low, he or she should be pretty much whole.

 

[Fermion]

Ummm.... didn't the market recover all it has lost? Unless a person panicked and sold low, he or she should be pretty much whole.

Exactly! So there should not be a pension problem.

 

[growing_older]

I am absolutely horrified that someone paid to create this empty and worthless video.

Sure many workers do not receive Social Security - because they also did not contribute to social security. That doesn't seem like a valid reason by itself that I should expect them to receive generous pension benefits.

 

[ERD50]

I am absolutely horrified that someone paid to create this empty and worthless video.

Sure many workers do not receive Social Security - because they also did not contribute to social security. That doesn't seem like a valid reason by itself that I should expect them to receive generous pension benefits.

I just watched it again from start to finish. Hmmmm, I wasn't sure who produced it, who is 'thisismyillinois.com/'? They didn't really list any credits other than that. But at the bottom of that web site, it does say ' Created by the IL Office of the Governor'.

So what is the point of this video? All I seemed to get from it was:

A) We should keep our promises.
B) Pensions have been around since Roman times.
C) Illinois doesn't have enough money to keep our pension promises.
D) Thanks in advance.

Thanks for what? Was there anything about a solution there? Even a question?

Maybe this is telling: Comments are disabled for this video.


-ERD50

 

[clifp]

Perhaps to provide entertainment to the masses, since throwing Christians to the lions is out of favor now days

 

[NW-Bound]

Ummm.... didn't the market recover all it has lost? Unless a person panicked and sold low, he or she should be pretty much whole.

Exactly! So there should not be a pension problem.

From 2000 to 2012, the S&P500 is pretty much flat with dividends reinvested and the inflation accounted for. Meanwhile, pension funds have been running their actuarial projection with real returns of 5% or higher. Hence, that is another factor to add to the shortfall.

 

[gcgang]

Easiest way to eliminate underfunded status is to raise your actuarial assumption for future rate of return. Unfortunately, most pensions already use a pretty high rate.
Hope, the opiate of the masses.

 

[youbet]

From 2000 to 2012, the S&P500 is pretty much flat with dividends reinvested and the inflation accounted for. Meanwhile, pension funds have been running their actuarial projection with real returns of 5% or higher. Hence, that is another factor to add to the shortfall.

The major cause of pension underfunding in Illinois is completely skipped or reduced contributions by the state year after year after year. Blagojevich, pre-prison, excelled at this but his predecessors, many of whom did prison time too, also contributed to the problem. Employee contributions were always made in full via payroll deduction.

 

[youbet]

I don't begrudge people their pensions either, but they need to find the money somewhere else other than taxes. Maybe a fairy or something.

Nobody comes to rescue my 401K when the market drops 50%...well, ok technically the fed did, but in a roundabout way... I am not sure they will rescue it the same way next time.

But if we want to raise taxes to fund retirement plans, I am all for people putting some extra in my 401K!

Extra? Oh bull poopy!

Do you get a employer match on your 401k? If you were promised an employer match and the employer reneged, would that be OK? if your employer made up the missed match later, would that be "extra?"

The Illinois public pension funds do not need "extra" money. They need the money that Blagojevich and other shady governors redirected from the pension funds to pet projects and other questionable uses. While employees contributed in full, Blago, and others, skipped payments.

 

[Gatordoc50]

The problem is that the government leaders and union leaders don't really want the public to know exactly what these pensions are costing. Otherwise, it would be simple to fix with a targeted tax like a gas tax.

 

[Chuckanut]

The major cause of pension underfunding in Illinois is completely skipped or reduced contributions by the state year after year after year. Blagojevich, pre-prison, excelled at this but his predecessors, many of whom did prison time too, also contributed to the problem. Employee contributions were always made in full via payroll deduction.

Shhhhh....... People are not supposed to remember that!