Comments on: Common sense on pension reform Chicago Community Stories Thu, 03 Apr 2014 01:18:42 +0000 hourly 1 By: John Terwilliger Sat, 12 Jan 2013 15:44:15 +0000 Wrong problem

Do you suppose the reason Illinois Politicians are having so much difficulty in solving the “pension problem” might be they are trying to solve the wrong problem? I am a 20-year retiree under SURS and I have studied the actuarial foundations it is based on and they look pretty solid to me. In fact, had the State made all its required payments to SURS over the past decades, SURS would now be about 104% funded! That would have cost the State about 10% of payroll each year – which isn’t too much considering the State didn’t pay any Social Security tax for any of these employees.

Maybe the problem is the antiquated and unfair way Illinois raises its tax revenue. As one example, why do I, as a retiree, not pay any Illinois income tax? It’s hard to explain this to my kids and grand kids. (I am willing to do my part to fix Illinois finances so long as we redo the whole system from top to bottom!)

Keep in mind it was a deliberate decision of past legislators to NOT PAY their required share into the SURS (and other) retirement systems. This big debt for back pay and interest to current and past state workers didn’t “just happen.” It was deliberate action of past legislators and governors.

For those of you still convinced that the SURS is a “lavish” and “unsustainable” plan that bleeds tax payers, take a look at:

When using this model be reasonable in choosing the employer contribution amount. Remember, if these employees were covered by Social Security, there would be a mandatory 6.2% of payroll contribution. Add to that an average 401k match of 2.5% and the employer match should be around 8%. If you want to use an employer contribution or 3% o 4%, the model will show how we got to where we are today! What does your employer do for you?

By: Curtis Fri, 11 Jan 2013 16:23:30 +0000 Here’s a comment that was posted on Facebook: “In fairness to the Nekrtiz/Biss bill, it did include a provision to try and lock in state contributions to each retirement system as a contractual obligation. The IMRF mechanism is excellent but impossible to exactly replicate at the state level because the legislature can just legislate it away. In addition to the new reamort schedule CTBA proposes, figuring out how to lock in the state contributions is the big trick to solving this mess.”

By: Leon Zalewski Thu, 10 Jan 2013 23:26:24 +0000 Thank you for the article on closing tax loopholes in Illinois to help with pension reform. I have another suggestion for a revenue stream.

Tax all retired public employees, including legislators, professors(like me, judges, municipal employees, etc., making over $110K. Public Employee Retirees EARNING over $110K from retirement monies, need tax deductions at the federal level. By taxing earnings over $110K, another revenue stream is created and provides retirees with a deduction at the federal level. (At the present time, my tax rate is higher than Buffet’s and Romney’s due to fewer tax deductions I can take for federal taxes!)
Leon Zalewski