Eight Forty-Eight - To Pension or Not to Pension...Then What?

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To Pension or Not to Pension...Then What?

Photo by Newton Free Library.

What’s your plan for retirement? Are you still waiting for the right time to start saving, or are you one of the handful of workers who will have a pension when you retire? That concern about retirement funds isn’t just household blues, it’s also a big problem for the state of Illinois. The unfunded pension liability for state government employees is tens of billions of dollars and growing.

Illinois Governor Pat Quinn has proposed reforming the state’s pension system and scaling back pension benefits for future employees. Critics say that puts an unfair burden on those who work for the state, most of whom receive modest pensions. Do you think state employees deserve pension benefits that you don’t have? Or does the state need a different fix for its financial situation?

Panel:
Laurence Msall—President of the government watchdog group, The Civic Federation
Henry Bayer—Executive Director of AFSCME Council 31, the union that represents state employees
Tom Mondschean—Professor of economics at the DePaul University

Music Button: Saxon Shores, "With A Red Suit You Will Become A Man", from the CD The Exquisite Death of Saxon Shore, (Burnt Toast records)

Jonathan Quist, Algonquin // Thursday, October 01, 2009 @ 11:08 PM

Thanks to the guests participating in this discussion. I'd like to raise two points I did not hear on the air. 1) The 70-plus billion dollar pension obligation is not a current debt, but rather a projection of the state's liability over the lifetime of pension recipients. Yes, the pension should be funded, but it sometimes seems that the dollar amount is being bandied for shock value. 2) With financial markets at the lowest levels in a very long time, would this not be an ideal opportunity to tighten our belts, and contribute as much excess funding as possible into the pension funds, and take advantage of the larger gains these contributions will realize as investments? And just a wild idea, though this is off the topic of the general pension fund - the Illinois Lottery was originally supposed to fund public schools. How much could we catch up on funding of teacher pensions if a single year of the Lottery's advertising budget were diverted toward that end?