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NewsWednesday, March 28, 2007 9:59 PM CDT
Illinois pension systems severely underfunded
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SPRINGFIELD -- A new state report says the nation's most under-funded state pension system continues to gobble up a bigger chunk of state resources, leaving less cash for other state programs.

According to Illinois Auditor General William Holland, the five pension systems that cover hundreds of thousands of Illinois state employees and retirees are under-funded by nearly 40 percent.

And, the amount the state needs to correct the under-funding continues to mushroom by billions of dollars each year. Last year, the unfunded amount of the pension grew by more than $2 billion, the report noted.

In its annual review of the state's five pension systems, auditors put the state's unfunded pension liability at $40.7 billion.

In his latest budget proposal, Gov. Rod Blagojevich wants to cut that amount to $15 billion by leasing the state lottery and selling bonds. He says his plan will bring in $26 billion and increase the pension system's funding level from the current 60 percent to 83 percent.

The governor's budget office said the audit shows that pension reforms imposed over the past four years are helping improve the under-funding problem.

"This is a strong indication that we're moving in the right direction," said Justin DeJong.

Lawmakers and observers are not embracing the governor's lottery lease proposal.

R. Eden Martin of the Civic Committee of the Commercial Club of chicago says the state needs to pare down its pension and health care offerings to its employees.

"Nobody in the private sector has programs like this, he said.

State Sen. Bill Brady, R-Bloomington, wants the state to switch to a 401k-style retirement plan for employees. But, his idea has not been embraced by the administration.

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Reader comments on this story - 20 total

Note: All views and opinions expressed in reader comments are solely those of the individual submitting the comment, and not those of the Pantagraph or its staff.

kdh wrote on Mar 29, 2007 3:44 PM:

" For those of you that don't understand the pension system in Illinois, employees pay in a percentage of their pay to the pension fund, just like non state employees pay Social Security. The reason that there is so high of a deficit is not the state employees fault. For too many years the state has used these 5 funds as a bank account to fund pet projects. Now that they have to pay back what they "borrowed" from these accounts they want to change the rules. Also the pension that they didn't raid is the Chicago teachers fund for obvious reasons. So please quit griping about the people who's retirement funds are in jeopardy and aim your ire where it truly belongs; the elected in Springfield. "

WHY wrote on Mar 28, 2007 9:25 PM:

" don't state of IL employees handle there own retirement in a 401k. Why do they give it to the state hoping to get it back when they retire. Pensions are for fools. The unions should WISE UP "

Thankful wrote on Mar 28, 2007 8:34 PM:

" I am thankful that I am not a State employee "covered" under one of these 5 pension systems. The pension system in Illinois is a train wreck that has already happened!!! Illinois is at the bottom of the list when it comes to fiscal responsibility and, in my view, both political parties are equally to blame. I am not sure what the answer is but believe me, we will all pay for this irresponsibility. "

To: to here's a thought wrote on Mar 28, 2007 8:24 PM:

" If you were an "external" working at State Farm, State Farm paid your employer for your services rendered. Your employer, NOT State Farm, provided for your benefits, if there were any. If you are are not a SF employee, don't put the blame on SF if you don't like your benefits. "

to jeez wrote on Mar 28, 2007 1:36 PM:

" **ahem** Republican George Ryan? Blago is a problem, but its not like he's the only one. "

to: fromHomer to TO HOMER wrote on Mar 28, 2007 12:17 PM:

" Your also paying for that crack head down the street with 5 kids. "

To: Jeez wrote on Mar 28, 2007 12:15 PM:

" It's been going on longer than we had a democrat govenor, he just not helping matters "

to here's a thought wrote on Mar 28, 2007 12:02 PM:

" Example: I worked at SF as an external. My benefits were extremely expensive with high coinsurance and copays. Then I went to work for another firm in town with significantly less expensive health insurance. Why did I deserve to pay so much more for so much less while I was a SF external? Never thought I'd say it, but get over this sense of entitlement. If you don't like your benefits, go find a new job - or go work for the state before Brady ruins it. I did. Play the game. "

fromHomer to TO HOMER wrote on Mar 28, 2007 11:22 AM:

" Ya ..... I'm paying for a war I don't approve of also ... as well as my neighbor's pension. What's a perk ? Can I get one of those also ? "

time for wrote on Mar 28, 2007 11:21 AM:

" them to raise my taxes "

here's a thought wrote on Mar 28, 2007 11:11 AM:

" The state has done such a bang-up job with managing pensions, and government in general, let's turn over operation of our utilities to Springfield. Seriously, I never have understood why state employees doing work essentially no different than anyone else's should be guaranteed a better pension than most of the rest of us. "

That Brady wrote on Mar 28, 2007 10:28 AM:

" I'm willing to bet that Bill Brady wouldn't give up his pension, but he'll make the rest of us State Workers give it up. "

to Homer wrote on Mar 28, 2007 10:27 AM:

" I don't support the war, but I have to pay for it. If I were selfish, I would resent paying for State Farmer's retirement when I pay my insurance bill. A pension is a job perk just like health insurance, time off, or anything else. "

to homer wrote on Mar 28, 2007 9:02 AM:

" It is called government. Believe it or not, we do have to have one and fund it. That is why you have to pay FULL health care coverage for all state employees until they die. Have a good day and keep paying those dollars. My back still hurts from sleeping in my state truck until I retired. "

nightcrawler wrote on Mar 28, 2007 8:54 AM:

" Gov. Rod has been inhaling too much hairspray. He has a fix for everything which involves no political downside for him. I am reminded of the difference between a politician and a statesman. A politician is running for office- a statesman is running from office. There is no doubt where he is in included. "

jeez wrote on Mar 28, 2007 8:28 AM:

" a democrat governor raids pensions, much like Jimmy Hoffa did, and a republican businessman can't even get a word in to help fund it. Keep going Billy, before Hot Rod steals all of the money to pay off his Chicago buddies. "

Pontiac Guard wrote on Mar 28, 2007 8:17 AM:

" so, Mr. Martin says we should give up some of our benefits because the politicians don't know how to balance a check book. Before any of you get started, I am well aware Ryan has just as much to do with this situation as Chicagovich does. I also know Judy T. may have not been any better. Neither one of those people are in office anylonger. That argument can't continue to be your answer to everything Blago. does. The pension problem is getting worse. This joker is borrowing money to pay the bills, what would happen if you or I tried to do this? If they want to fix the deficit in the budget, they need to raise the income tax 1% for everone who earns $50,000 or more per year, and adopt a pay as you go policy. What happens when your water heater goes out, or you need a new roof and you don't have the money in savings to fix it? you buy a new one on credit, and cut back on non essentials to pay for it. You don't borrow money for your home, and then spend the money on a vacation. "

Double standards wrote on Mar 28, 2007 7:26 AM:

" If Corporations let their Pension get under fund they have so much time to get back to a certain % if they don't they get penalized by the government. Maybe the Feds need to start penalizing the states? "

Lawmakers wrote on Mar 28, 2007 7:23 AM:

" Looks like our goverment officals have to good of retirement. "

Homer wrote on Mar 28, 2007 7:22 AM:

" What's a pension ? Can anybody own one ? We don't have any of those where I work. As I understand it however, I will have to pay for other people who own one. I have a hard time understanding why I don't have one but I am required to pay for the one my neighbor has. Maybe someone out there can explain this to me ? "

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