The Sun-Times’s editors have come out in opposition to plush pensions paid to retired or, in some cases, allegedly retired civil servants:
- Raise the minimum age at which City of Chicago and Cook County workers can receive a pension from 50 to at least 60. Private companies don’t pay pensions that early; neither does Social Security.
- End “double-dipping,” the practice by which a worker collects a pension from one government job while on the payroll for another government job.
- End the practice of increasing state pensions 3 percent a year. Automatic raises are rare for private pensions, and Social Security payments are increased only by the cost of living, which is usually less than 3 percent a year.
- Tax pensions. Illinois is one of the few states that does not. As Sun-Times columnist Mark Brown suggested Sunday, this could be a progressive tax, exempting the first $50,000 to $75,000.
- Revoke an absurd state law that allows dozens of lucky people to collect public pensions based not just on their government jobs, but also on private-sector jobs for labor unions, lobbying groups and other nongovernmental organizations. That law allowed a former city road worker, Dennis J. Gannon, to collect a yearly city pension of $153,649 –largely on the basis of his big salary later as head of the Chicago Federation of Labor.
- And finally, as we have urged before, it’s time to impose a two-tier pension for state employees, with new hires getting less than current employees.
In my view elected officials shouldn’t be paid pensions for having been elected to office and, most especially, shouldn’t have the power to vote themselves pensions. That is an inescapable conflict of interests.
Additionally, public pensions should go to defined contribution plans rather than defined benefit plans as have most businesses in the private sector. It isn’t merely the gold-plated pensions that present fiscal problems for governments at all levels in Illinois.
Unfortunately, the prospects for such reforms are practically zilch and, due to Illinois’s unique circumstances, it would take a constitutional amendment to enact even the least controversial among them.
My only nit is that elected officials contribute 11.5 % of their salaries to the pension, which I believe is to offset lack of Social Security eligibility. Also, I assume a lot of the the big pensions for people like judges are also largely paid for by payroll contributions and simple to resolve even if it means converting to a defined contributions system.
I believe the focus on the six-figure pensions in these articles obscures the greater problem of people making more moderate incomes in pension programs with lower contribution rates (4%). Plus, state law has some sort of pension enhancer for high-risk jobs, that I once read covers about a third of all state employees.
Also, my biggest complaint is the state setting minimum pension levels for city and local governments. My city could find good workers without salary and pension levels commensurate with higher cost of living areas of the state. All the state’s unfunded mandate did was encourage downstate governments to fire people.