The State of Illinois’ pension funding gap has now reached $86 billion.
That’s right- $86 billion.
And one of Illinois’ leading business groups- the Civic Committee of The Commercial Club of Chicago- has just issued a letter to its members and Governor Pat Quinn that the pension crisis has gotten to the point that even if the Illinois General Assembly takes drastic action in addressing the issue, the state’s pension systems will still run out of money to pay promised benefits. From correspondence dated November 14:
Dear Governor Quinn:
As you well know, the Illinois budget has crumbled under the heavy weight of the state’s underfunded pension obligations. We’ve watched and waited as our state’s leaders have time and again been unable to make the choices necessary to put us back on sound financial ground. Our latest sobering analysis has led us to conclude, as I have shared in the attached memo sent today to members of the Commercial Club, that under current circumstances the pension system is unfixable.
We base that statement on more than just the overwhelming numbers. The magnitude of the unfunded obligations, combined with a total lack of political courage to rectify the situation, leads us to believe that our pension systems can no longer be salvaged sufficiently to meet their current obligations. This is tragic, both for those who participate in the systems and those who pay for them, but it did not come without warning or proposed solutions…
(Editor’s note: Italics added for emphasis)
The Civic Committee concluded their stinging assessment of the state’s public pension program and its political leaders with the following:
Illinois has become the poster child for state finances gone awry.
Being the “poster child” for anything typically sucks- as is the case here.
If you happen to participate in one of these pension plans, it’s probably wise to explore fall-back plans in case this source of retirement income doesn’t pan out as expected.
You can read the entire letter from the Civic Committee of the Commercial Club of Chicago on Scribd.com here.
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