Anyone who has any grasp of reality understands that Illinois’ public pension systems are in dire financial shape.
But the Civic Committee of the Commercial Club of Chicago this week put it in terms more blunt than anyone else has to date:
“The pension crisis has grown so severe that it is now unfixable,” former state Attorney General Tyrone Fahner, the committee’s president, wrote in a memo to the club’s members. “We do not make that statement lightly. It is an honest statement that no one – not our legislators, nor our governor, nor labor leaders – is willing to say publicly.”
The Commercial Club is an influential business group, and the Civic Committee is a group of senior executives from top Chicago-area businesses. It has been studying the pension crisis for the past six years, according to an Associated Press story on the memo.
The memo said that current state employees won’t see the retirement benefits they are being promised because there simply isn’t enough money and never will be.
The committee is recommending that the 3 percent cost-of-living increase that retirees receive be eliminated, that caps be placed on benefits, and that the retirement age be increased to 67. It also recommends that local school districts eventually assume responsibility for their teachers’ pension costs.
The report was greeted with the familiar response from pension fund defenders, who claim that the problem isn’t as bad many make it out to be.
We’ll admit that the numbers are so big – both in terms of the money involved and the public employees and retirees affected – and the formulas so complex that it’s hard to fathom just how severe the problem is.
But no one’s disputing that the pension systems are, at a minimum, underfunded by more than $80 billion. And no one’s disputing that the problem only continues to get worse with inaction by our state’s elected leaders.
The Civic Committee’s memo should serve as a call to action to Gov. Pat Quinn and the General Assembly.
Pension reform must happen now.