Illinois’ pension conference committee is once again rumored to be nearing a “fix” for the state’s pension mess.
But if the pension conference committee is serious about saving the pensions of state retirees and workers who have dedicated their careers to public work, they will put an end to cost-of-living-adjustments, or COLAs, for government retirees with six-figure pensions.
For example, annuitant Dr. Leslie Heffez of the State Universities Retirement System, or SURS, will receive a half-a-million-dollar pension in 2013. But on top of that Dr. Heffez will receive more than $15,000 in an annual COLA.
That annual COLA alone is more than the $14,000 average annual social security benefit received by private sector retirees.
By protecting the COLAs of the wealthiest state retirees, the committee is putting the retirements of the vast majority of state workers, including teachers, at risk. With the pension system suffering a shortfall of more than $0.60 for every $1 it owes, there is a real possibility that retirees may not get their pension checks in the near future.
The list of retirees from the five state-run pensions receiving more than six figures in pensions is long.
There are more than 8,000 government retirees who receive more than $100,000 in annual pension benefits and the COLAs that go with them.
Here’s a look at the top 25 in each pension fund.
The conference committee could dramatically improve the health of the state’s pension systems by means-testing COLAs of career state workers. But by doling out COLAs to some of the state’s wealthiest retirees, the committee continues to ask taxpayers and workers to subsidize gold-plated pensions.
COLAs are responsible for nearly one-third of the state’s nearly $100 billion official unfunded liability.
Today, state retirees get an automatic, compounded 3% cost-of-living increase every year, regardless of inflation, costing the state hundreds of millions of dollars each year.
The committee’s apparent proposal, which ties COLAs to half the annual rate of inflation, allows future COLAs to go as high as 4% — higher, even, than today’s 3% COLAs.
This isn’t good enough.
The state is bankrupt and workers retirements are at risk.
It’s time to means test COLAs for state workers.