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What is modest about state pensions?

Mike Fanella wrote a letter calling Illinois’ proposed pension reform plan “brash” and that public employees were being “victimized” and “steamrolled” by media and politicians.

The facts show something else — it is the taxpayers of Illinois that are being “victimized” and “steamrolled,” not the public employees.

I have reviewed all the actuarial reports from the five state pension systems for the period 2000 through 2010. What they show is taxpayers (euphemistically known as the “state”) have contributed $31 billion to the pensions, including pension bond interest, while employees have contributed only $13 billion. That means taxpayers have contributed 238 percent as much as the public employees.

Based upon those facts it seems to me it is the employees who are behind on their payments not the taxpayers. How about a 50-50 split?

Another myth is the so-called “modest” average pensions received by state retirees. We often hear about the average teacher pension of $46,000 a year. However, that average is based upon only 25 years of 9-month-a-year work. If someone in the private sector begins work at age 22 and retires on early Social Security at age 62, he has worked 40 12-month years for a maximum Social Security pension of $22,000.

Of the 184,000 state pension retirees, less than 1 percent have worked what most of us would consider a full career, 40 years.

The teacher’s average pension of $46,000 is worth 4 times what Social Security would pay for the same years and salaries. Pensions worth eight times Social Security are common for the 5,467 state retirees with pensions of more than $100,000 a year.

Why would anyone consider four times Social Security for a partial career to be modest?

Bill Zettler

Director of Research

Family Taxpayers Foundation

Carpentersville