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Is Your State Of Illinois Pension System A Problem Or Predicament?
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Is Your State Of Illinois Pension System A Problem Or Predicament?

Any American who is for prosperity should take a look at the State of Illinois Pension System and ask how Illinois got itself in this disastrous mess. Illinois retirement experts estimated that Illinois would owe an additional $422 million to its public employee retirees in 2012 but later realized the figure to be closer to $1 billion. Democratic Gov. Pat Quinn promised to make the payments in 2012 but didn’t specify how he would accomplish this.

Quinn admitted that past governors and General Assemblies have postponed pension payments and failed to make some payments to the Illinois public employee pension system during the past three decades. Overall, Illinois owes its public employee retirees close to $6 billion in 2012 for all five of the state’s pension plans. Some Illinois politicians believe a solution is to expand gambling in order to generate more revenue. Do you think that the Illinois pension system will stabilize or even improve enough to pay retirees their promised pensions in the future? If you are an Illinois public employee or retiree I urge you to continue reading.

Illinois public service workers include the teachers who teach our children in public schools, emergency responders including police and firefighters who are there for us when we need them, and social workers who provide hope to those of us who have family or loved ones who are not fortunate enough to be able to care for themselves. These employees were people who read their job descriptions prior to applying for employment and were willing to sacrifice lower pay when the private sector was earning more and knowingly accepted less than glorifying positions in government work when other careers were available. However, most people who accept these Illinois government positions do so with the understanding that they will pay into the Illinois pension system for the duration of their career in return for a pension they can count on and once retired have passive income for life. Unfortunately, the pension they were promised by their employer is close to not existing any longer.

In 2011 Illinois faced a structural budget deficit of $12 billion and almost half of that is related to pensions and health benefits to retired workers. If you are one of the retirees who are counting on this pension to make ends meet you might find a moment of comfort if you read page one on the State Employees’ Retirement System of Illinois web site. Here you will read that your retirement benefits are based on a retirement formula provided by state statute. Also your benefits won’t be reduced or eliminated for any reason. The website mentions that the Illinois Constitution provides protection to your retirement benefits. Do you instinctively trust that these promises on the Illinois retiree’s website will hold true?

Now I don’t know about you but I find these statements on the Illinois retirement website to be frightening. If the state of Illinois feels they need to make these claims on their retirement website they must have some grave concerns themselves. And they should have concerns because there is no one to bail them out of this mess. If anyone thinks the U.S. government is going to bail out the Illinois pension system or its state government financial crisis then they should consider the statement by Federal Reserve Chairman Ben Bernanke in 2011 stating “We have no expectation or intention to get involved in state or local finance.” Basically don’t expect financial help from the Federal Reserve.

Do you feel comfortable that Governor Pat Quinn promises to reform the Illinois public employee’s pension system in a year when every seat in Legislature is up for reelection? I don’t think you can afford to put your entire financial future in a politician’s hands when you consider that your state is considered in the 48th worst financial position of all 50 states overall.

If you are an Illinois state employee or retiree I beg you to ask yourself one question. But before I give mention to the question I think it is most important for you to trust your answer to the question. You must absolutely trust your own instincts and gut feeling on this. Do you think the Illinois state pension crisis is more of a problem or a predicament? A problem can be solved even if it is a very difficult problem. Predicaments are not able to be solved. There lies an end result that you have no control over. I truly believe that your state of Illinois pension system crisis is a predicament and that you would be best suited to accept the fact that your pension will not be there for you when you retire. You should navigate your own alternate course now and have a smooth landing once the pension crashes.

If you are an American looking for prosperity then educate yourself on the status of your pension and the financial well being of the state you live in and work for. If something doesn’t feel right to you then you are probably right. In fact, you know you are right. The federal government won’t provide a pension bailout. But if I told you that you can save yourself and still obtain passive income for life would you do it? Now is the time for you to take action. Only you can save yourself and give your pension fund the bailout it needs. Navigate your landing now because this is not just an Illinois state government problem. This is your predicament.


Street Talk

Miscalculations may be partly from how the money was invested, given the way the economic crisis clobbered so many investments. The problem spreads globally - thanks for highlighting it. Good article.

Reply
  about 1 decade ago

You're right Cynthia, they have been miscalculating for a long time and attempting to misrepresent the numbers. Unfortunately, they can only miscalculate and misrepresent for so long before it all comes to a head. I think the head is about to burst. Thanks so much for commenting Cynthia

Reply
  about 1 decade ago

As a recent retiree from the State of Illinois in two pension systems, state employees and university employees, I am appalled at the mistakes being made in the calculations of my pensions. One has shorted me service time and the other has miscalculated the annuity amount. Plus, Social Security is waiting on those final numbers to see how to screw me on my Social Security payment. I have mounds of papers and letters, six alone from SS, each one quoting a different amount for my SS payment. Thank God I made sure I paid into deferred comp. I am so frustrated with it all I could scream!!

Reply
  about 1 decade ago

I know it's frustrating Andrea. Your deferred comp was a good idea. I just hope you have a pension at all soon. Illinois needs a miracle to ensure it's government workers will receive pension checks moving forward. You can start a solid Plan B by checking out my links Andrea. Then let me know if you have any questions. Best of luck!

Reply
  about 1 decade ago

Yes, elected officials getting full benefits for life while other government employees have their benefits taken away seems to be the way it is going these days. Especially unfair when elected officials only need to work a handful of years before they are eligible for pension and benefits.

Reply
  about 1 decade ago

I have a pension plan with the State of Ohio. Elected officials get great benefits and pension plans. Then they say the state employees and government employees get too many benefits or need to restructure their pension plans. That is very unfair.

Reply
  about 1 decade ago
AJ  

Illinois's state pension program is definitely in trouble, as are many other state pension plans. It's always wise to have a Plan B.

Reply
  about 1 decade ago

It's a shame so many government workers have paid into the Illinois state pension system and are now in a predicament that requires a Plan B

Reply
  about 1 decade ago
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