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| NewsWednesday, March 28, 2007 9:59 PM CDT |
Illinois pension systems severely underfunded
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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