Illinois Pension Crisis
Illinois is one of the great states in United States. It is the 5th most densely inhabited state with an extensive and diverse economic base. The dollar gross state product for Illinois by 2010 was estimated to be US$652 billion while the state’s taxpayer burden in 2011 approximately hit US$38,500 mark per taxpayer. On top of this, unemployment rate in the state was estimated at 11.5% as of March 2010 and it has been decreasing with time. Currently, Illinois is going through the worst pension crisis in history. The recent passage of the breakthrough Illinois pension bill implies that the long fight over how to address the massive pension crisis will shift to courts.
There has been a lot of hullabaloo on whether the Illinois pension issue is a crisis that demands nation attention or not. Many leaders within the state have controverted their statements many times on the issue. The pension crises that have been facing Illinois have not only impacted state operations, but also have threatened education, public safety, social services and any other area of the public interest. Like many other states in Unites States, the ratio of workers to pensioners has been declining on daily basis.
With many public servants anticipating for retirement security, there have been differences on whether to abide to the Illinois pension systems. If proper reforms are not decreed, many retirees will lose or have their pensions deducted. These taxpayers will be pushed into huge bailout and the youngsters in such for better jobs might not pension at all. With a bill being tabled by the Illinois senate, it is wise to keep a number of things about the Illinois pension crisis in mind. They include;
- The Illinois pension crisis is a vast burden to the taxpayers as they are on the nail for more than $203 billion in local pension and state deficit. This means that, every household has a deficit of $42,000.
- The structure of the Illinois pension system can be blamed for the catastrophes. Most of the residents unfunded liabilities are due disaster of defined benefit plans.
- More than 63% of current Illinois state pensioners retired before the age of 60 years, a decade before those in the private sector.
- The current pension bill will not save the day and common citizens as it will do more harm than the anticipated benefits. This is because the bill will only reduce Illinois pension deficit to 2011 levels. The bill also lets state workers to retire in their late 50s and enjoy full benefits that come with their retirement package. On top of this, the pension bill also reduces state work contributions, placing larger burden on the taxpayers.
- The average Illinois state retiree contributes only 6% of what they will receive in his or her pension payouts. This means that, many workers contribute less and expect to earn more when their retirement benefits are due.
Illinois is facing the worst pension crisis in United States. Pension reform bills have been passed, but many have been a step backward for the state. For Illinois to overcome this pension crisis, real reforms that will move the state away from defined benefits and in relation to worker-controlled retirements need to be ratified and save the state from indebtedness.
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