Reick Sees for “Structured Federal Bankruptcy” for State Pension Plans as Only Solution

From the Illinois News Network:

Illinois lawmakers differ on how to ‘fix’ Tier II pensions

State Rep. Robert Martwick, D-Chicago, and state Rep. Steve Reick, R-Woodstock, talk about Tier II pensions.

State lawmakers are hearing concerns over Tier II pensions for public employees. One said a fix will likely cost taxpayers more. Another said the only answer is bankruptcy.

Robert Martwick
Robert Martwick

State Rep. Robert Martwick, D-Chicago, held a hearing in Springfield to get testimony from various pension boards for police, fire, local government employees and teachers.

The issues, he said, could lead the state’s Tier II pensions to be found by the federal government to be insufficient for retirees. He equated it to a “landmine.” 

“If that happens, it could create an instant and massive debt to the state of Illinois,” Martwick said.

Martwick couldn’t say how much that debt would be, but whatever it is would be tacked on to the state’s $135 billion unfunded pension liability. That doesn’t include the increased cost of taxpayer subsidized public employee retiree health care that’s estimated in the tens of billions of dollars.

Lawmakers are considering what Martwick called possible “fixes” to alleviate concerns.

“We don’t know this for sure yet, but it would seem as though there is going to be a cost associated with this fix,” Martwick said. “The only question is, is this a cost we take on now, is this a cost we take on later? How much will it be in both instances and how do we do it?”

Steve Reick

State Rep. Steven Reick, R-Woodstock, said he see only one fix.

“I don’t see anyway around this other than structured federal bankruptcy for the state pension plans,” Reick said. “I don’t want to do that. But I think that the need exists for the rest of the people of the state of Illinois to have a little bit of an end to this. We can’t go to 2045 and pay $20 billion into a pension plan and still be underfunded at that time.”

Reick said this issue isn’t only about state pensions, it’s about local police and fire pensions, too.

“All these pension plans are on the verge of collapse and there’s no unicorn out there,” he said. “Show me the tree where money grows and I’ll go ahead and go out and pick it, but it doesn’t.”

Rieck warned against raising taxes to cover the bill. He said: “Government has the power to tax and the power to tax is the power to destroy.”

More hearings on the issue are expected in the weeks ahead.


Comments

Reick Sees for “Structured Federal Bankruptcy” for State Pension Plans as Only Solution — 9 Comments

  1. One thing we can bet on, whatever the solution, government will not be proactive in Doing it.

    If they were honest and told constituents the truth, that pensions are insolvent and recommended dissolution and portable plans in the future, they would be elected out of office.

    So in the meantime we pretend all is well.

  2. Lowball the interest (discount rate) of the 5 state pension funds at an aggregate 6% (each of the 5 state pension funds has its own discount rate).

    $135,000,000,000 x.06 = $8,100,000,000.

    $8.1B pension interest annually.

    That’s the estimated cost for one year of the 5 state pension funds not being 100% funded.

    The 5 State of Illinois pension funds being TRS, SERS, SURS, JRS, and GARS.

    That does not include local police (Downstate Police), local fire (Downstate Fire), IMRF, Cook County, and Chicago pension funds.

  3. Bankruptcy, haircuts, revision of the Illinois Constitution and elimination of colas are in order.

    Also, all government workers should be put on some kind of 401 plan as well as contribute more to health insurance premiums.

  4. Ostrich politico.

    Rearrange Titanic deck chairs.

    That’s his job.

    Give whites bricks and they will build a city, give others a city and they will turn it into bricks.

    Reick should watch this video: https://www.youtube.com/watch?v=5R9mIV05SwM

    Mr. Reick is a exactly a judas goat.

  5. **Give whites bricks and they will build a city, give others a city and they will turn it into bricks.**

    Good god, what is wrong with you?

    The fact that this blog enables a constant stream of racist comments is embarrassing.

  6. Hey Censor Alabama, what’s untrue about the statement?

    Go back to your foul hole.

  7. Hey Dr. Pepper/anonymous coward-

    I bet you voted for the alcoholic real estate salesman from Queens, didn’t you?

  8. Maybe Alabama-child should refrain from visiting here.

    Look, Alabama, why can’t you direct your attention to the video referenced.

    I agree with it because it corresponds to my real world experience.

    You want to criminalize free speech.

    That won’t do. PS.: I emailed the video’s site to 38 friends.

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