ILLINOIS — One senator wants to transform the state’s pension system.
Senator Dale Righter says it’s time to get rid of Illinois current pension system and start fresh. It would let people control their pensions like a 401k plan.
“It is the worst unfunded pension system in the United States.”
It’s no surprise the state is suffering from a pension crisis and it’s not just hurting state employees, it’s impacting millions from all income levels. For people like UIS Professor Ron McNeil he says it wasn’t always like this.
“When I came to Illinois in 2002 for Massachusetts it was a defined benefit and I had no choice then.”
A benefit that is great to some, however paying these pensions is catching up because the state can no longer afford them.
“It is not a broken system it is a broke system it’s $130-$200 billion in debt, so it’s really broke.”
That’s why Senator Dale Righter wants to stop this trend. He rather see pension payments go towards higher education and k-12. Righter says in 2015, approximately 47% of all state taxpayer dollars for K-12 education went to pay for pensions.
“We’re putting almost one out of every two dollars into pensions rather than into schools, one out of every two dollars,” said Sen. Righter (R) Mattoon.
His bill would require any new employee receive a 401k style plan, not a benefit plan with guaranteed annual increases.
“Allows the employee to to manage their own money so they contribute a percentage to their pay and then their employer (the state government) and their case matches that contribution.”
More than a dozen other states have picked up on similar 401k styles like Sen. Righters.
State University Retirement Systems are the only employers who can choose this type of retirement package instead of taking a pension.
“Back home this is what people talk about. They talk about the fact that they don’t like that state employees have this pension benefit, which is so much better.”
Senator Righter says there is some backlash from lawmakers on his proposal because a lot of groups in the Capitol benefit greatly from the current pension system.