Pension Reform

Pension Reform

The single biggest financial problem facing Illinois are unfunded pensions and growing pension liabilities. Lawmakers have made efforts in the past to get around some of these pension liabilities, or to reduce them in general, but in reality, this problem is continually kicked down the road for future generations.

The last major attempt to reform pensions was signed into law in December of 2013. The law sought to stop automatic yearly cost of living increases for retirees, it sought to extend retirement ages for current state works, and limited the amount of salary to be used to calculate pension benefits. Government employee unions sued, arguing that the state constitution holds that pension benefits amount to a contractual agreement and once they’re bestowed, they cannot be “diminished or impaired.” In 2015, the Supreme Court of Illinois agreed with government employee unions upholding the pension protection clause in the 1970 Illinois Constitution.

While Bubba Harsy agrees that under the Illinois Constitution that pension benefits cannot be diminished or impaired, he does believe they can be eliminated entirely. Article I, Section 16 of the Illinois Constitution states that “No ex post facto law, or law impairing the obligation of contracts or making an irrevocable grant of special privileges or immunities, shall be passed.” The pension promises made to government employees of Illinois are irrevocable grants of special privileges that were never valid in the first place.

Government pensions are backed by tax payer dollars and state and local government pension obligations continue to grow. In 2015, state and local pensions made up over 25% of Illinois’ budget. This is up from 8% of Illinois’ budget in 2005. This trend is unsustainable to the point that pension promises made to government employees can only be seen as special privileges granted to government retirees and are in fact unconstitutional pursuant to Article I, Section 16 of the Illinois Constitution.

When looking at government employee pensions as a whole, they appear to be nothing more than special privileges granted to government retirees. A majority of government workers retire in their 50s, most receive automatic 3% boosts to their pensions annually regardless of what is practical based on the market, most retirees only have to pay in about 8 to 16 percent of what they actually receive in retirement benefits, lifetime payouts for over half of Illinois government retirees will be over double the average Social-Security payout of a private sector worker, government retirees have their pensions guaranteed by taxpayer dollars, Illinois government retirees receive benefits not found anywhere else in the private sector, and are some of the best pension guarantees found among state governments retirees throughout the United States.

Since it is illegal under the Illinois to reduce any one single aspect of government pensions and government employee unions do not wish to have reasonable negotiations on the matter, Bubba will seek to nullify these special privileges granted to government retirees that are disguised as pensions.