For the Good of Illinois

Benefits Pro: Tell your clients stories from the pension wars

May 24, 2016 01:58 PM
(not rated)
 2016-06-04_14-58-33
 
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Tell your clients stories from the pension wars

The pension benefits of already-troubled plans can't be sustained through 30+ year retirements--your clients need to be told this, to plan ahead

MAY 24, 2016 | BY RICH WHITE
 
 
2016-06-04_15-01-23
 
 
Highland Park, Illinois, is an affluent north-Chicago suburban community of about 30,000 people. If you live there and dream of achieving the good life in retirement, you should work for the public school system.
 
In this one zip code (60035), there are more than 200 former public school employees who collect annual pensions above $100,000 from the Illinois Public School Employee Pension system. We know this because of data made public by the Open the Books project.
 
Even with benefit cuts, the Central States Pension Fund is expected to go broke in 10-15 years, dragging down with it whatever is left of the PBGC’s multiemployer program. There just aren’t enough workers contributing to multiemployer plans to fund benefits for all retirees promised pensions.
 
In the private sector, several large companies, led by General Motors, have met pension funding obligations by selling long-term bonds at low interest rates. The New York Times reported that at the end of 2015, GM’s plan, covering 360,000 pension recipients, was underfunded by $10.4 billion.
 
 
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