Pension funds

Our state’s underfunded pension fund is a ticking time bomb just waiting to explode. But Illinois isn’t alone — several pension funds across the country will run out within the next decade.  Chicago Tonight talked to a finance professor about the drastic action needed to avoid a nationwide financial meltdown.

Related links

State pension funds headed for crisis of national proportions

Pension Security Bonds: A New Plan to Address the State Pension Crisis

by Joshua Rauh, associate professor of finance at Kellogg School of Management

On March 25, 2010, Eddie Arruza led a panel looking at how far the state’s pension reform rules would go in slowing down the state’s river of red ink. View that video below.

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4 responses to “Pension funds”

  1. Marilyn Krzus says:

    Thank you, Phil Ponce, for hinting at the goodies contained in the state employees’ pension plan. I don’t think I’ve ever seen it mentioned that the plan is a defined benefit plan, wherein the employees receive a specific benefit with a–completely unheard of–cost of living increase (how outrageous is that?)?? Wow! It’s the same platinum parachute that put Greece and France in a bad way; and the taxpayers–who could lose ALL their retirement funds (mostly paid for by the taxpayers themselves in their defined contributions plans) have to foot it? Wall Street Greed has nothing on state employee greed! Time to revolt!!

  2. JayThom says:

    I think we need to slow down here; everyone is looking at the one side to an issue and jumping to conclusions as usual. The majority of state workers are hard working blue collar people who live paycheck to paycheck – albeit a steady paycheck. Most of these people work hard and never reap the gross benefits the top 1% of state employees see in compensation. These people are electricians, plumbers, construction workers who were smart (or lucky) enough to secure a solid job and should not be penalized for it. Gross over spending and corruption are to blame for the states situation – not pensions for the regular guy. Let’s not panic; keep our focus where it needs to be – on ridiculous spending, no-bid contracts and fiscal responsibility. Come on people, we are smarter than this!

  3. maureen conliss says:

    I agree with Jay Thorn. Illinois voters have handed the finances of this state to incompetent and corrupt politicians. We need to choose our representatives more carefully and watch what they do every step of the way. I am a 60 year old nurse with 27 years of experience. When I retire, my pension, if it is still there, will give me a stable living (I hope)!! It is not by any means an extravagant lifestyle. And please don’t forget, as state employees we contribute to that fund from every paycheck. I myself have contributed approximately $200,000 over the last 20 years and the state has been using that money and I will get very little in social security payments.

  4. Marilyn Krzus says:

    State pensions are the other Ponzi schemes. (By the way, we ALL work hard!). Imagine kicking in a minimal amount (while the rest of us hard-working folks are saving in 401(k)s–which may or may not lose the bulk of our own contributions when the economy tanks (and these pensioners, who don’t lose a dime, want us feeling sorry for them?), retiring 10-20 years before the rest of us can (the gap will be wider when they change retirement age for us little guys to 67!), and getting COLAs. So they could effectively be retired and making increasing income for 40 years!! That means the rest of us will have to kick in ever more in tax dollars for them–what are the rest of us getting out of it besides longer work lives so the other half can live off us?