Thursday, May 24, 2018

Addressing Illinois’ Pension Debt Crisis with Reamortization (from the Center for Tax and Budget Accountability)

"Illinois' five state pension systems face a debt crisis after years of intentional borrowing from state contributions. The crisis is compounded by a back loaded repayment plan that calls for unrealistic, unsustainable state contributions in future years, putting funding for crucial public services at risk. Because the crisis is about debt, rather than benefits being earned by current and future employees, attempts to solve the problem through benefit cuts have failed. CTBA proposes resolving the pension debt crisis by re-amortizing our payment schedule, creating a sustainable, level-dollar plan that saves the state $67 billion and gets the pension systems 70 percent funded by 2045. To bridge the higher contributions called for in the first several years of the re-amortization plan, CTBA suggests using bonds to ensure current services do not have to be cut."

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