State and local government employees collect taxpayer-guaranteed pension benefits that are far more generous than those available to most private-sector workers. The cost of traditional defined-benefit public pensions is unsustainable and has severe financial consequences that will affect generations of Americans. Use the calculator below, on the left-hand side of the page, to estimate the pension that you would collect after a career as a general government employee and to see how much money you would need to save on your own (your total annuity cost) to replicate that guaranteed income stream in the private sector.
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Illinois is facing a crisis. Conservative estimates put the state's debt to its pension systems at $85 billion. On top of that, it owes another $45 billion in healthcare benefits to future retirees. Additionally, the state must pay back $17 billion in bonds that were issued to cover pension costs. The state has no means and no plan to repay this debt, and the expense of retirement benefits is overwhelming many areas of the budget.
The consequences of inaction will be staggering. In many crucial areas of Illinois' budget, state government will be paying more for retirement costs than for the services that families pay taxes to receive. Bold action is needed to balance the state's pension funds while keeping Illinois from falling into an economic death spiral.
Voters understand that Illinois faces a budget crisis. They are outraged over a record tax increase that has been used to cover retirement costs. Polling shows support for a proposal that would give employees a choice of benefit packages that state government can afford.
Illinois cannot climb out of its current financial hole without cutting long-term pension costs. Taxpayers cannot afford to pay future retirement benefits unless the recipients of those benefits also pay a fair share towards their own retirement costs. If Illinois is to be economically competitive, if state government is to work properly, pension reform is a must.
To learn more about the problem:
- Read the Illinois Policy Institute's Pension Fact Finder to learn about Illinois' generous employee pensions.
- Check out the Institute's entire pension reform portfolio at www.IllinoisPolicy.org/pensions.
- Join our email list to receive the latest information on pension reform from the Illinois Policy Institute.