12th Annual Illinois Pension Report
Chicago – Taxpayer Education Foundation (TEF) today released its 12th annual report on the Illinois statewide government pension systems. Every year, TEF analyses pension data received through Freedom of Information Act (FOIA) requests for the 6 statewide pension funds. TEF calculates estimated lifetime payouts for each pensioner based on the state’s laws and IRS actuarial tables.
Based on the 2018 pension data and the annual reports of the specific pension funds, TEF has determined that at least 19,481 pensioners are receiving $100,000 or more in annual pension payments. That level of payout has increased about 15% over the 2017 pension payments. At this rate of increase, the number of pensions over $100,000 will far exceed 21,000 in 2019. Pensions over $50,000 a year are now at 107,092.
The total cost to taxpayers for the 6 statewide funds is $8.7 billion from the state general fund and an additional $933,937,321 from property taxes for the IMRF whose taxpayer deposits are entirely funded through property taxes. This does not include any of the Chicago government pensions or the hundreds of police and fire pension funds throughout the state. For perspective, for every dollar that the government employees have deposited to the statewide pension funds, taxpayers have been forced to deposit $4.50. Put another way, that is approximately $683 for every man, woman, and child in the state for these 6 pension fund payments only.
It would be intellectually dishonest not to consider how pension obligations stack up against all of the other demands on taxpayer money. Nearly 25% of all money collected from taxpayers goes to fund the pensions of former employees. This is money being paid for services rendered sometime in the past, in competition for the services needed today. As this burden for past services becomes greater and greater, thanks to a compounded cost of living adjustment for retirees, fewer taxpayer dollars will be available for education, healthcare, safety, and security.
This Pension Crisis is decimating Illinois. Harvey Illinois was forced to lay off 25% of police employees and 40% of firefighters to pay lavish pensions. Harvey is just the beginning, as many more municipalities are facing the same fate. The state legislature must now allow local governments to declare bankruptcy to save Illinois. It is also imperative that new-hires be placed into a 401(k) style retirement savings account rather than into one of the defined benefit pension funds.