by: Diane Benjamin
A fireman in Bloomington gave an example of his pension at a Townhall meeting this week. He said he would retire at age 56 with a $40,000 a year pension. I don’t know anybody who would fault a guy who risked his life to keep us safe a $40,000 a year pension.
The problem is what happens to the $40,000. He could live until his 70’s or even more. EVERY year another 3% of last years pension is added on. If 3% of $40,000 was added every year, the pensions in Illinois would not be bankrupting taxpayers. Here’s what is really going to happen:
Contributions made by an employee will not cover this kind of increase. This doesn’t even include post-employment benefits.
USA today published a story 2 days ago predicting 85% of pension plans will fail in the next 30 years. Illinois pensions are much closer to failure than 30 years, especially Chicago. The system is not sustainable. One more market crash and there won’t be any pensions. Government and the citizens do not have enough money to cover what was promised. http://americasmarkets.usatoday.com/2014/04/09/report-85-of-pensions-could-fail-in-30-years/
Social Security is in no better shape. Benefits are now paid from the General Fund. See this post: http://blnnews.com/2014/03/24/defeat-dickie-round-2-2/
Just because we are guaranteed payments, doesn’t mean we will get them. People expecting pensions need to face reality while there is still time.
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Not to mention the demise of the dollar as a main impetus of inflation, regarded by many as a hidden tax. Whatever was promised as more becomes less and less. State and nation economists are infected by cherry picked info becoming the latest aerial dropped leaflets of propaganda as locally common sense economics has little presence in the hallowed council chambers. The Renner/Hales garden of potted plants is oblivious to the economics that surround them. Suspecting that professor of political science should be chairman of the local economy is a stretch.