An ongoing bipartisan effort in Illinois is pension reform. According to Bloomberg, Illinois owes $129 billion to its five retirement systems after years of failing to make adequate annual contributions. One proposal being tossed around to shore up the balance sheet is to borrow money by issuing bonds.
There are state-run pension funds that cover downstate and suburban teachers; state employees; state university employees; judges and lawmakers; suburban and downstate police and firefighters; suburban and downstate municipal workers; and seven funds in Chicago and three in Cook County.
According to a March 2017 Commission on Government Forecasting and Accountability report, projected accrued pension liability is estimated to reach $328.7 billion by Fiscal Year 2045.
Several lawmakers, including Senate President John Cullerton and Senate Republican Leader Bill Brady, have introduced various synopses to decrease this liability. These reforms include a 401(k)-type plan; a pension buyout provision; and changes to Cost of Living Adjustment (COLA) increases. Governor Bruce Rauner is also in support of this issue.
The controversies that surround these reforms are the impact on retirees and union negations and constitutionality.
Michael Best Strategies will continue to monitor this story; continue to check this website for updates.
