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Chicago – Val Zimnicki, the Director of Outreach for Taxpayers United of America’s (TUA), today spoke before the Cook County Board. In his speech, he urged the board to reform the Cook County pension system.
“Cook County finds itself in the same dire condition as the state’s government-employee pensions funds,” he said. “The cause is the same: a lavish, gold-plated pension plan that allows county bureaucrats to retire early and collect huge pensions for decades for doing nothing. It is mathematically impossible for Cook County to tax its way out of this problem.”
According to publicly available sources, it is stated that the Cook county pension fund was only 60% funded, creating a $6 Billion unfunded liability. However, it was recently revealed through FOIA requests that the fund was just 36% funded and the unfunded liability was really $15.3 billion as of December 31, 2015.
“Until the Illinois Constitution is amended to allow pension benefits to be reduced, there can be no short-term solution to the bankrupt county pension system. There is a solution, but it is more of a long-term solution, so the sooner this reform is started, the more notable will be the results. Eventually, as the current county retirees pass from the scene, the county pension plan will recover.”
In his speech, the Director of Outreach offered solutions the board to help prevent a looming pension crisis.
“All new county hires must be put into their own retirement plans, such as 401(k)s. They must plan for their retirements outside of the county pension plan. A 401(k) is a feature of a qualified profit-sharing plan that allows employees to contribute a portion of their wages to individual accounts. Elective salary deferrals are excluded from the employee’s taxable income. Furthermore, employers such as you can contribute to employees’ accounts.”
Cook County Gov. Retirees’ Millionaire’s Club
Val Zimnicki (312)-427-5128 – (312) 307-4415
November 28, 2017
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Chicago – Taxpayers United of America (TUA) has released its most recent government pension study exposing individual pensions for Cook County government retirees.
“One look at these excessive pensions tells you why Cook County is in dire financial straits. Government bureaucrats have created a tight little millionaires’ club of their own,” stated TUA’s director of outreach, Val Zimnicki.
There are nearly 500 area Cook County government retirees collecting annual pensions of at least $100,000. The median family income is only $56,851 and 16.1% of residents live below the poverty level.
“That puts a $1,374 liability on every man, woman and child in Cook County. Add to that the per capita liability from the 5 state pension funds of $19,607, and every Cook County resident is on the hook for $20,981,” stated Zimnicki. Moody’s Investor Service puts Illinois’ state pension fund liability at $251 billion.
As of December 31, 2016, the Cook County Pension Fund (CCPF) has a stunning $7.2 billion unfunded liability. That means the CCPF is only 56.7% funded. A healthy pension fund has at least an 80% funding ratio, although the American Academy of Actuaries argues that pension funds should be 100% funded.
“On average, these government pensioners who collect more than the median household income for Cook County, contribute only about 7.5% to their own retirement fund. In the private sector, employees pay 15% of every dollar they earn into Social Security for an average pension of only $15,000!”
“Cook County government bureaucrats are desperate to steal even more tax money from hard working taxpayers, so desperate in fact that Cook County Board president, Toni Preckwinkle imposed a tax on sweetened beverages that hit the low and middle income earners the hardest!”
“The tax, which TUA opposed, was a $200 million tax increase on county taxpayers, which would have gone into the lavish, gold-plated pensions of retired county-government employees.”
But the Cook County Board was forced to repeal the tax when angry citizens testified at the County Board Hearing. TUA’s own, Val Zimnicki was one of many who testified on behalf of taxpayers at that hearing. “Preckwinkle and one other board member voted to keep the beverage tax. She should be thrown from office.”
“It’s so hypocritical of Cook County Democrats to preach about tax reform that protects the middle-class when they bombard the working class with new and higher taxes on services and products most used by this group of taxpayers,” added Zimnicki.
“If there’s any justice, the pending lawsuit, Bargo v Rauner et al, will break the Constitutional protection of the government employees. This protection creates a special class of citizens that directly violates the Illinois Constitution.”
“Just look at what some of these retired government bureaucrats are raking in from taxpayer funded pensions.
Hernan M. Reyes collects an annual pension of $359,613. Assuming he leads a normal life of 85 years, that annual pension will accumulate to $5,846,235. That multi-million dollar payout only cost him $329,637!
Then there’s Subhash Patel. Collecting a current annual pension of $217,045 will provide an outrageous estimated lifetime payout of $7,887,410. Keep in mind that retirement came at only 59 years of age! “Click below to view the top 200 pensions for Cook County Retirees:
“Overpromising benefits to government employees is pervasive throughout Illinois. Without regard to the taxpayers who must fund these excessive pensions, these bureaucrats just keep increasing salaries and benefits, burying the rest of us in debt.”
“The worst part of this financial nightmare is that no steps have been taken to correct the course of Illinois’ fiscal demise. We have proposed solutions that could have an immediate affect on the problem: Immediately place all new hires into 401(k) style retirement savings accounts, increase member contributions to their retirement fund, increase retirement age for full benefits, and increase member contributions to 50% of health care premiums. Anything short of these reforms will do nothing to permanently solve the problem. If it takes a Constitutional Amendment to revise government-employee pension benefits, then we need to get that on the ballot as soon as possible,” concluded Zimnicki.