(The Center Square) – Illinois spends more on pensions than any other state and a new report highlights the cost of so-called “double-dippers” who collect a full pension and get another job.
The nonprofit Wirepoints cites a former Illinois school superintendent who retired with a $230,000 pension before taking another position in Texas.
With an automatic 3% yearly raise, Tom Leonard will receive about $6.4 million in pension benefits from Illinois taxpayers based on actuarial assumptions when his annual Illinois pension jumps to $370,000 a year. According to the report, Leonard contributed a total of $322,000 to the Illinois Teacher’s Retirement System over the course of his career.
“They are not doing anything wrong, it is what the lawmakers allow them to do,” Wirepoints President Ted Dabrowski said. “I critique the lawmakers for allowing people to be able to retire that early and get a full pension and get jobs.”
The official shortfall at Illinois’ five state-run pension funds, which includes state workers, judges, teachers and university employees, increased to $144 billion in 2020, up $7 billion from the year before, according to a report by the Commission on Government Forecasting and Accountability.
Moody’s Investors Service had a different take on the amount, putting Illinois’ net pension liabilities at closer to $317 billion.
Gov. J.B. Pritzker has said the state can’t change pensions because the Illinois Constitution forbids it. Dabrowski isn’t buying it.
“Gov. Pritzker said it is a fantasy to think about pension reform, but what needs to happen is we need to move, going forward, all benefits that are earned into a 401(K)-style account,” Dabrowski said. “It is a simple solution and it works.”
He adds the state should also suspend the automatic 3% raises for most retirees until pensions are fully funded and require state retirees to pay for more of their health insurance costs.
As for when pension reforms might taken up in Springfield, that is anyone’s guess.
“We need to make sure that we don’t keep making the same mistakes and make sure we fix them on a moving forward basis,” said state Rep. Mark Batinick, R-Plainfield.