Pension Reform

Tazewell Taxpayers Trounced by Government Pensions

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East Peoria, IL – Taxpayers United of America (TUA) has released its most recent government pension study exposing individual pensions for Tazewell County government retirees, as well as Pekin municipal, Tazewell County and Tazewell County government schools, Illinois Central College, and Pekin police and fire retirees.
“There are more than 30 government teachers in Tazewell County collecting annual pensions in excess of $100,000. These lavish, gold-plated pensions all accumulate to $1 million to $5.2 million over a normal lifetime. These pensions are so rich for a number of reasons: 3% compounded cost of living increases, regardless of economic conditions, receiving full retirement benefits as early as 55 years old, taxpayer contributions that exceed teacher contributions by nearly four times,” said Jim Tobin, President of Taxpayers United of America (TUA).
Across the five state pension funds and the Illinois Municipal Retirement Fund (IMRF), there are more than 15,661 government pensioners collecting six-figure annual pensions and more than 92,386 retirees collecting over $50,000 annually and those pensions increase by 3% compounded every year for each of the pension funds, except IMRF. After about 20 years, the pension doubles, so government retirees make more in retirement than they made when employed.
The median household income across Tazewell County is only $57,052 and the poverty rate is 9.6%.
“In the private sector, taxpayers are forced to pay 15% into Social Security for every dollar they earn, receiving an average annual pension of only $16,000! And yet for every dollar that government pensioners contribute to their own pensions, taxpayers are forced to pay $3.76. Imagine what kind of nest-egg taxpayers would have if we were allowed to invest what we are forced to pay into Social Security and the Illinois State government pension systems,” added Tobin.
“This should serve as a glaring warning to taxpayers who are concerned about their rising property taxes, as cities like Pekin and East Peoria in Tazewell County are forced, by law, to raise property taxes without a referendum to fund IMRF pensions,” said Tobin. “It’s legal plunder of hardworking taxpayers for the benefit of the political class.”
“The top estimated lifetime pension in this study of Tazewell County government retirees is $6,644,309. And the lucky recipient of this rich pension is John Erwin who retired from Illinois Central College with an annual pension of $188,064. His personal investment in this wealthy outcome is only about 4.8%.”
“The top annual pension award in Tazewell County goes to Thomas Thomas who, like John Erwin, retired from Illinois Central College at the age of 60. His current annual pension payment is $205,979. These annual payments will accumulate to about $4,872,095. His contributions constitute about 3% of this multi-million dollar payout.”
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“Tazewell County taxpayers need to fire all incumbent bureaucrats on November 8 who have voted to perpetuate this economically devastating system that benefits the few at great expense to the many,” said Tobin.
“Fixing this system is basically easy, but will never happen as long as those who are entrenched in its benefits remain in office: Transitioning new hires to 401(k)-style defined contribution pension plans would be a good start to halting the growth of the problem. As for the current unfunded liabilities, allowing municipalities, school districts, and other taxing districts to reorganize through Chapter 9 bankruptcy, or pursuing federal legislation to preempt the Illinois Constitution’s pension-protection clause, are both becoming very real possibilities if systemic reforms aren’t pursued soon,” said Tobin.
TUA’s most recent 10th Annual Illinois State Pensions Report contains additional data concerning the state’s government pension crisis and elaborates on further solutions to this long-term problem. Check out our list of 218 Illinois referenda to see if you are facing a local tax-increase referendum on November 8.

American Legislative Exchange Council| The Williams Report: A look at fiscal headlines from statehouses nationwide

Taxpayers United of America’s Executive Director, Jared Labell, was quoted by American Legislative Exchange Council about pension reform.


State Budgets

Illinois: Governor Signs Stopgap Budget — But Relief from Stalemate Proves Temporary
A deal cut by Illinois lawmakers and Governor Bruce Rauner will keep state government running for another six months. Just minutes after the spending measure was signed, the two sides resumed trading barbs.
Massachusetts: Baker ‘Rightsizes’ the State Budget
Governor Baker signed a $38.92 billion state budget last week, after cutting $256 million from the original bill. The savings resulted from roughly 300 line items and 500 earmarks vetoed.
North Carolina: Governor Signs State Budget
Governor Pat McCrory signed a $22.3 billion state budget into law on Thursday. The budget includes raises for teachers and state workers, as well as a middle class tax cut.
Pennsylvania: Vape Shops Hit Especially Hard by New Taxes in State Budget
In the aftermath of product-specific tax hikes, “vape shops” across Pennsylvania are struggling to remain afloat. Vaporized nicotine is often used by those looking to quit smoking, and yet it is treated the same as cigarettes under the new law. Even nicotine-free vapor products are now heavily taxed.
Texas: Budget Dance Begins
It’s time for the “Texas Budget Two-Step,” according Watchdog.org’s Mark Lasheron. The dance began with a joint letter from the Governor, Lieutenant Governor and Speaker of the House to every government agency, calling for 4 percent reductions in their spending requests. Various interests groups have already responded with panic.

Pension Reform

National: The Funding of State and Local Pensions: 2015-2020
A new study from the Center for Retirement Research at Boston College finds the funded status of state pension plans further declined in 2015 under new GASB rules. The study authors warn that, if markets fail to recover this year, “funding will drift lower.”
California: CalSTRS Tanking Teachers Pensions to be Politically Correct
The California State Teachers’ Retirement System has pledged to invest heavily in “low-carbon strategies” both at home and abroad. “The losers will be the retirees and the taxpayers,” writes the California Political Review. “CalSTRS, the teachers’ pension system does not even pretend to be investing for the betterment of the retirees.”
Illinois: State Pension Reform Needed to Avoid ‘Catastrophic’ Fate
A new report from Taxpayers United of America (TUA) confirms the unsustainability of public pensions in Illinois. Jared Labell, TUA’s executive director, specifically faults Article XIII, Section 5 of the state constitution, which “unfairly chains generations of taxpayers to an uncontrolled financial burden created by the disastrous decisions of politicians in Springfield.”
New Jersey: Pension Reform at a Crossroads in the Garden State
Erica Jedynak asks her fellow New Jerseyans: “Do we have the courage to reform a broken pension system that’s driving us towards insolvency?”
Rhode Island: Worried About Risk, Pension Fund Managers Mull Conservative Investment Approach
General Treasurer Seth Magaziner stressed the need to be “a little more risk-averse,” but did not say projected returns should be lowered accordingly.

Government Pensions Gobbling Up Tax Dollars in Henry County

View as PDF Geneseo, IL – Taxpayers United of America (TUA) has released its most recent government pension study exposing individual pensions for Henry County government retirees, as well as Geneseo and Kewanee municipal, local school, and police retirees.
“There are more than 240 retired government teachers in Henry County collecting pensions that will accrue to seven-figure estimated lifetime payouts. Unlike the private sector, these government school retirees will become multimillionaires by not working and retiring on average at 57,” said Jim Tobin, President of Taxpayers United of America (TUA).
Across the five state pension funds and the Illinois Municipal Retirement Fund (IMRF), there are more than 15,661 government pensioners collecting six-figure annual pensions and more than 92,386 retirees collecting over $50,000 annually.
The median household income across Henry County is only $52,518 and the poverty rate is 11.3%.
“On average, these government pensioners will have contributed only about 9.8% to their own lifetime retirement payout. Taxpayers are on the hook for every penny of any shortfall in pension funding, whether funding the system through state income taxes or property taxes for IMRF, and the last decade has been disastrous. Forcing taxpayers to pay such a heavy portion of someone else’s retirement is criminal,” said Tobin.
“In the private sector, employees are forced to pay into Social Security for every dollar they earn, receiving an average annual pension of only $16,000 from Uncle Sam! That total pales in comparison to the amount of tax dollars siphoned away by government retirees every year.”
“More than five hundred Henry County government retirees are former IMRF employees in a county of barely fifty thousand residents. This should serve as a warning to taxpayers who are concerned about their rising property taxes, as cities like Geneseo and Kewanee in Henry County are forced by law to raise property taxes without a referendum to fund IMRF pensions,” said Tobin. “It’s legal plunder of hardworking taxpayers for the benefit of the political class.”
Jack B. Schlindwein, who retired in 2013 at age 54 from Geneseo CUSD 228, is set to receive the highest estimated lifetime pension payout in this study. His current annual pension is $116,882, and he contributed a total of $168,380 to his own pension, easily recouping his total contributions within two years of retirement. He has already collected $302,595. His taxpayer-funded pension payout will accumulate to more than $5.3 million! And his personal investment in that payout is a mere 3.2%.”
Harold E. Ford also retired from Geneseo CUSD 228, but in 2003, and at the age of 55. He currently receives the largest annual pension in the study, collecting $140,577 a year in retirement. The total contributions made to his own pension while employed, $138,952, were less than what he collects during a single year of retirement. His annual pension payments, with compounded annual cost of living adjustments, will accumulate to more than $4.4 million! His personal investment was only about 3.1%.”
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“The financial situation in Illinois is dire. Concerned residents and taxpayers must demand reforms from their local politicians and state legislators. Resolving the crisis is possible, but it won’t be an easy road, considering how many current and former government employees are entrenched in the system,” said Tobin.
“Transitioning new hires to 401(k)-style defined contribution pension plans would be a good start to halting the growth of the problem. As for the current unfunded liabilities, allowing municipalities, school districts, and other taxing districts to reorganize through Chapter 9 bankruptcy, or pursuing federal legislation to preempt the Illinois Constitution’s pension-protection clause, are both becoming very real possibilities if systemic reforms aren’t pursued soon,” said Tobin.
TUA’s most recent 10th Annual Illinois State Pensions Report contains additional data concerning the state’s government pension crisis and elaborates on further solutions to this long-term problem.

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Taxpayers United Of America: (TUA). is a nonpartisan, 501(c)(4) taxpayer advocacy group. Founded June 27, 1976 in Chicago, Illinois by activist and economist Jim Tobin, TUA works on behalf of taxpayers to reduce local, state, and federal taxes. In the past forty years, TUA has saved taxpayers more than $200 billion n taxes and has become one of the largest taxpayer organizations in America. Check All posts. s.

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