Illinois Watchdog | As Illinois pension problems worsen, here’s what legislators will take home

TUA’s Executive Director Rae Ann McNeilly discussed Illinois’ public pensions in this article from Illinois Watchdog.

ilwatchdogSPRINGFIELD – While Illinois politicians wrestle with how to tame the state’s ballooning pension shortfall, some of those leaving elected office in January will contribute to the problem by drawing large pensions of their own.
For example, three statewide candidates rejected this year by voters will be eligible for hefty pensions.
Gov. Pat Quinn will be eligible for $136,000 in pension payments per year when he retires in January. His pension is for the time he served as governor, lieutenant governor, treasurer and as an aide in Gov. Dan Walker’s administration.
State Treasurer Dan Rutherford failed to gain the GOP nomination for governor but will be eligible for an $115,319 pension in January. The pension is for his time as treasurer and as a state legislator.
State Rep. Tom Cross, R-Oswego, lost his bid for state treasurer but still can collect an annual pension of $81,016 based on his time as a state lawmaker. Cross has served as House minority leader, but was able to maintain outside employment as a lawyer.
In addition to their pensions, lawmakers first elected before Jan. 1, 2011, are eligible for free health insurance for their rest of their lives if they served at least four years in the General Assembly.
Lawmakers can begin receiving their pensions at age 55 once they are fully vested. To be vested in the system, a lawmaker or other state elected official, who entered office before 2011, need only to have served four years.
“Legislators shouldn’t receive a pension for a part-time job. In many ways, they are insulated from the realities the rest of us are. They have their retirements provided for. They have health insurance provided,” said Rae Ann McNeilly, executive director of Chicago-based Taxpayers United of America.
She suggested that instead of providing lawmakers with pensions, legislators should save and invest for their own retirements.
But not everyone agrees with McNeilly’s assessment.
For example, state Sen. Mike Jacobs, D-East Moline, said he deserves the pension he will receive.
Jacobs, 54, lost his bid for reelection Nov. 4, but he will be eligible to begin drawing his $34,579 pension next year based on his 10 years of service in the Illinois Senate.
“Public life is very difficult. A lot of people don’t realize how much you put into it,” Jacobs said “If I’ve got 10 years in I’ve earned every damn cent of it. I’ve been attacked and ridiculed. It’s been very difficult on my family. It’s not an easy life.”
But McNeilly said there is an inherent conflict of interest for judges, lawmakers and senior policymakers to be drawing state pensions while making decisions on the state’s pension liabilities.
“These people working for government for the most part earn more than they would if they were in the private sector, they collect far larger pensions. In fact, most people in the private sector aren’t eligible for a defined benefit plan. Our retirements are subject to the ebbs and flows of the marketplace, but we are being told that we have to support government pensions to protect them from the ebbs and flows of the marketplace.”
Eileen Norcross, a senior research fellow at the Mercatus Center at George Mason University took a different tact.
“Illinois has the worst-funded pension system in the nation. It would show some real leadership if these elected officials would step away from pensions and go to defined contribution [410-k type] plans. Think of all of the teachers and other public workers who face diminishment of their benefits because the money is not there.”
In fact, two lawmakers leaving the General Assembly, State Rep. Rep. Josh Harms, R-Watseka, and Brad Halbrook, R-Shelbyville, opted not to participate in the pension system altogether.
After losing an election or retiring, lawmakers frequently return to Springfield to pursue lucrative careers as lobbyists. They also can take jobs in the executive branch, which can further boost their pensions.
Jacobs said he does not plan to lobby or pursue a state job, but is not sure what he will do when he leaves office in January.
“I think I’m going to use my considerable talents somewhere in the private sector,” he said.
Gov. Quinn has not responded to media inquiries about his plans after leaving office. And Treasurer Rutherford was not available to discuss his future his spokeswoman said Thursday.
Of course, it isn’t just those who lost on Election Day who will be able to collect state pensions now.
For example, state Rep. Mike Bost, R-Carbondale, won election to the U.S. House of Representatives where he will receive a salary of $174,000 from U.S. taxpayers. And he is eligible to collect an annual pension of $73,0176 from the state of Illinois while he is in Congress. Bost served 20 years in the Illinois General Assembly.
Bost told Illinois News Network that he has not decided whether to begin collecting his pension when he turns 55 next year.
But he added he believes the state’s pension system is in crisis and believes Illinois should either reduce pension benefits for new hires or put them into 401-k type plans.
“Something has got to be done, the state can’t just go bankrupt,” he said.


This is Why Judges Get Pensions

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Chicago—Taxpayers United of America (TUA) did not endorse or support the government pension reform that was passed last year because it fell drastically short of what is needed to adequately reform Illinois’ government pension cabal. It is no surprise that judges ruled to protect the rights of pensioners at the expense of every taxpayer in the state, according to Rae Ann McNeilly, executive director of TUA.
“This is why judges get pensions. The fact that the judges’ pensions were suspiciously omitted from reforms means nothing. Judges certainly understand that if reforms are upheld in a court challenge, it establishes precedent for future modifications of the Judges’ Retirement System (JRS).”
“Judges should never have been added to the pension system in the first place. Doing so has automatically placed them in a conflict of interest in ruling on any pension changes. The recent ruling in the government union challenges to the reforms of the Public Act 98-0599 definitively illustrates that conflict.”
“Illinois is technically bankrupt, with government pensions at the heart of the financial turmoil, and yet this court ruling has tied the hands of every taxpayer. In other words, the state says, ‘we will take your money, your house and all of your property if we have to, in order to fund the lavish pensions of the specially protected government elite.’”
“Not only do the government employees enjoy higher than average private sector pay and benefits, nearly iron-clad job security, no accountability for quality of work or outcomes, and judicially protected gold-plated pensions, but their livelihood is prioritized before the people who fund them.”
“Simple math and basic economics dictates that the government pension crisis can’t be solved through taxation, yet here we are with a ruling that limits any possible solution for economic growth. Therein lies the problem.”
“At the very least, new government hires should be placed in a retirement savings account like a 401(k)-style plan. Every day new employees are added to the system, perpetuating the problem. We have reached the point of financial gridlock where tax revenues are being so heavily consumed by government employees who provided services in the past, no resources are available for the employees who would provide needed services today.”
“There is no longer any question that the current system of guaranteeing government employees’ absolute and indefinite financial security is unsustainable, yet the lunacy of forcing taxpayers who are subject to the financial risks inherent in an ever-fluctuating market to fund such an insolvent system continues.”
“The mere fact that there is a Constitutional provision that protects a specific class of people above and even at the expense of the taxpayers is suspect. We need to do whatever is necessary to protect all taxpayers.”
“As long as so many millions of dollars are at stake for judges, legislators, and policy makers, we can never expect fairness to the taxpayers. The very future of Illinois depends on it. If an amendment is necessary to correct the problem of existing employees’ pensions, then let’s get it done. Let’s put an end to this insanity once and for all.”

WAND-TV NewsCenter 17 | Taxpayers United – Government Retirees Getting Rich On Pensions

TUA’s pension project on Champaign and Decatur, Illinois, is featured in this news story from WAND-TV NewsCenter 17., NewsCenter17, StormCenter17, Central Illinois News-
Decatur – Taxpayers United of America is providing government pension information at its website The taxpayer watchdog is highlighting pensions for retirees of the cities of Decatur and Champaign. Both Macon County & Champaign County, along with school districts in those counties. And the University of Illinois & Richland Community College.
Hundreds of retired local government retirees are getting multi-million dollar pensions,” said Rae Ann McNeilly, executive director of TUA. “It is past time to bring government pay and benefits in line with private sector compensation because simple math tells us that we can’t tax our way out of financial debacle.”
Taxpayers United is calling on the legislature to end defined benefit pension plans for new government employees. Instead TUA would prefer to see 401-k style pension plans.
The Social Security Administration says the average life expectancy of an individual is about 85 years. That would mean retirees retiring in their 50’s and 60’s could collect pension benefits for 30 year or more.