A continuation of the analysis of the current situation in Illinois by WirePoints:
Fact 3
3. Pension shortfalls. Illinois’ pension shortfall tripled to over $100 billion in the decade before Rauner took office. That was despite the $17 billion in pension obligation bonds and the 2011-2014 tax hike that in total dumped nearly $45 billion into the state pension funds. By 2014, Illinois politicians had already created the nation’s worst pension crisis.
The crisis was so deep that in 2014 Democratic lawmakers and then-Attorney General Lisa Madigan defended pension reform bill SB1 in front of the Illinois Supreme Court. The state argued the severity of the crisis justified the use of emergency powers to override the state’s constitutional pension protection clause.
This is a taxpayer nightmare and Illinois is an outlier in this category, not mainstream.
Most states have problems.
Illinois has really big problems.
The pensions are currently less than 40% funded.
Meaning that 60% is missing (not in the fund).
Meaning no investment returns on the missing 60%.
Meaning taxpayers are obligated to massive interest costs, since there are no investment returns on the missing 60%.
+++++++
100% funded means 100% of what the actuaries calculated should be in the fund as of the specified date, is in the fund.
+++++++
A comparison to how this equates to a 401K.
So let’s say a financial planner says you should have $100,000 in your 401K right now to retire comfortably (given your expected retirement date, expected earnings to retirement, expected social security payout, life expectancy, anticipated needed revenue in retirement, etc.).
But you only have $40,000.
Your 401K would be your problem.
++++++++
So not only do taxpayers with an underfunded 401K have to worry about how to make up the difference in their 401k, they have to worry about how the state of Illinois will tax them to make up the difference in the public sector pension fund.
Because the taxpayers are responsible for 100% of the unfunded liability.
Public sector employees and retirees are responsible for zero percent of the unfunded liability.
And the pension and retiree healthcare sentence in the state constitution has been interpreted by the IL Supreme court to mean not only are the taxpayers responsible for 100% of the pension unfunded liability, but 100% of the retiree healthcare costs for the public sector workers.
Even though pay hikes continue to be granted, which hikes pension payout.
Even though pension benefits were hiked by legislators and Governors while pensions were underfunded.
Even though retiree healthcare benefits were hiked by legislators and Governors while pensions were underfunded and not enough money was being set aside to be invested so the retiree healthcare could be paid out sustainably as the bills come rolling in in the upcoming decades.
After a pension or retiree healthcare benefit is granted, it is decades before the bigger payouts come due, as greater numbers of people receiving the benefit retire and are eligible for the benefit as time goes by.
Zillow has estimated the value of Illinois at $4.
Mark you are correct.
I had a fella on FB complain that we put these politicians in office and it is our fault that their Union Pensions are in jeopardy.
I mentioned to him that Illinois is controlled by the Unions, especially the IEA and the Local branches in each district and they vote them in.
He is retired and on a Pension from the State Police.
He has not replied back.
Between Election Fraud and The Unions, Illinois does not have a future to look forward to.
Illinois Democrats’ Astounding Reversal On Pensions:
https://www.zerohedge.com/news/2019-02-05/illinois-democrats-astounding-reversal-pensions
Progressives Zero-In On Exit-Tax On Illinois Wealth:
https://www.zerohedge.com/news/2018-11-13/progressives-zero-exit-tax-illinois-wealth
Soltion: Leave Illinois
https://www.youtube.com/watch?v=nXoEybgAEDk
You might be taken seriously if you could spell swordfish.
Did u attend a Chicago inner city school swordy?