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Illinois is unique, though. The thing is: part of a person's paycheck goes into a fund that is supposed to support their pension. So they're not really passing

Illinois is unique, though. The thing is: part of a person's paycheck goes into a fund that is supposed to support their pension. So they're not really passing the buck to the next generation, the money they contribute is supposed to be there for them when they retire. The PROBLEM is that corrupt politicians in the 90s used the pension money and basically lost all of it. So we're in a situation where the money that should have been sitting around for people with pensions to draw from is GONE, and all we can do is scoop and throw until a miracle happens. edit: I shouldn't editorialize and say "corrupt politicians", please mentally replace that phrase with "The money was badly mishandled"

schnable 9y ago
Even if the money was there, all the projections when they created the pension benefits assumed unrealistic rates of return.
- jasode 9y ago
  >, all the projections when they created the pension benefits assumed unrealistic rates of return. It would be interesting if ComputerGuru's post was "politicians promised mathematically impossible pensions" instead of "undeserved pensions". Maybe the replies would have focused on that aspect. The issue is that the unrealistic pensions were promised by politicians instead of competent actuaries. With promises like automatic 3% annual pension increases, they've created an exploding liability that even Norway and Sweden couldn't fulfill. Illinois created promises that exceeded the productive capacity of its citizens' tax base.
  - electricEmu 9y ago
    Would that be the difference between "something possibly reasonable" and "what we have now" coming from the pension fund?
ckinnan 9y ago
Did you read the report? The problem is that PROMISED pension benefits have grown, there's no funding problem if the amount of promised benefits grew with the economy or with revenue.
maxerickson 9y ago
Defining the benefit and failing to fund it is literally passing the buck. Doesn't matter if the failure is intentional, luck, whatever.
crusso 9y ago
The PROBLEM is that corrupt politicians in the 90s And how did those corrupt politicians get into office and stay in office?
- Avshalom 9y ago
  corruption
- p3llin0r3 9y ago
  You raise a valid point, I shouldn't editorialize in this context. I don't KNOW if it was corrupt politicians. Better to say: "The money was badly mishandled"
rayiner 9y ago
Except the whole point of the article is that even if the State had put in the money it was supposed to, that wouldn't have kept up with the promises. And also, you're whitewashing the role of public employees. Those "corrupt politicians" are Democrats who keep getting elected with the support of teachers', police, etc., unions. Chicago's pension holidays, for example, resulted in that money going to CPS directly, to support higher salaries and the "pension pickup" (where the school district covered most of teachers' required pension contributions).
- p3llin0r3 9y ago
  You're absolutely correct here, saying "corrupt politicians" was lazy and means nothing. Additionally, I agree there were failures at many levels regarding the promises made to the people of Illinois. Honestly, I don't completely absolve the citizens of Illinois ( Of which I am one ). As the article states, these pension numbers NEVER added up and for some reason people kept buying into the "free golden ponies" narrative.
jeffdavis 9y ago
"The PROBLEM is that corrupt politicians ... lost it all" That's hardly unique. It's the expected result when you let the government hold on to money for the future, rather than a bank. Banks are bound by laws designed to prevent these kind of problems. Governments are not.
chaostheory 9y ago
I could be wrong but I thought California has the same mess, but most likely more massive. http://www.sacbee.com/news/politics-government/the-state-worker/article198062129.html http://www.sacbee.com/news/politics-government/the-state-wor...
- crispytx 9y ago
  Satoshi? Is that you?
  - chaostheory 9y ago
    nope :( unlike him I haven’t built anything that’s had a big impact... yet
rhino369 9y ago
They deserve some of their pensions. Whatever they funded themselves plus a reasonable rate of riskfree return. But they are promised a lot more than a reasonable rate of return.
deleted 9y ago
[deleted]
bunderbunder 9y ago
> part of a person's paycheck goes into a fund that is supposed to support their pension. Yes. In Illinois, that portion is supposed to cover on the order of 10% of their pension, and taxes are (presumably) supposed to cover the other 90%. This figure is including market returns from initial contributions. Bad mishandling may have made the situation worse, but, even if it had been handled perfectly, it still would have been unworkable.

schnable 9y ago

Even if the money was there, all the projections when they created the pension benefits assumed unrealistic rates of return.

jasode 9y ago
>, all the projections when they created the pension benefits assumed unrealistic rates of return. It would be interesting if ComputerGuru's post was "politicians promised mathematically impossible pensions" instead of "undeserved pensions". Maybe the replies would have focused on that aspect. The issue is that the unrealistic pensions were promised by politicians instead of competent actuaries. With promises like automatic 3% annual pension increases, they've created an exploding liability that even Norway and Sweden couldn't fulfill. Illinois created promises that exceeded the productive capacity of its citizens' tax base.
- electricEmu 9y ago
  Would that be the difference between "something possibly reasonable" and "what we have now" coming from the pension fund?

ckinnan 9y ago

Did you read the report? The problem is that PROMISED pension benefits have grown, there's no funding problem if the amount of promised benefits grew with the economy or with revenue.

maxerickson 9y ago

Defining the benefit and failing to fund it is literally passing the buck. Doesn't matter if the failure is intentional, luck, whatever.

crusso 9y ago

The PROBLEM is that corrupt politicians in the 90s And how did those corrupt politicians get into office and stay in office?

Avshalom 9y ago
corruption
p3llin0r3 9y ago
You raise a valid point, I shouldn't editorialize in this context. I don't KNOW if it was corrupt politicians. Better to say: "The money was badly mishandled"

rayiner 9y ago

Except the whole point of the article is that even if the State had put in the money it was supposed to, that wouldn't have kept up with the promises. And also, you're whitewashing the role of public employees. Those "corrupt politicians" are Democrats who keep getting elected with the support of teachers', police, etc., unions. Chicago's pension holidays, for example, resulted in that money going to CPS directly, to support higher salaries and the "pension pickup" (where the school district covered most of teachers' required pension contributions).

p3llin0r3 9y ago
You're absolutely correct here, saying "corrupt politicians" was lazy and means nothing. Additionally, I agree there were failures at many levels regarding the promises made to the people of Illinois. Honestly, I don't completely absolve the citizens of Illinois ( Of which I am one ). As the article states, these pension numbers NEVER added up and for some reason people kept buying into the "free golden ponies" narrative.

jeffdavis 9y ago

"The PROBLEM is that corrupt politicians ... lost it all" That's hardly unique. It's the expected result when you let the government hold on to money for the future, rather than a bank. Banks are bound by laws designed to prevent these kind of problems. Governments are not.

chaostheory 9y ago

I could be wrong but I thought California has the same mess, but most likely more massive. http://www.sacbee.com/news/politics-government/the-state-worker/article198062129.html http://www.sacbee.com/news/politics-government/the-state-wor...

crispytx 9y ago
Satoshi? Is that you?
- chaostheory 9y ago
  nope :( unlike him I haven’t built anything that’s had a big impact... yet

rhino369 9y ago

They deserve some of their pensions. Whatever they funded themselves plus a reasonable rate of riskfree return. But they are promised a lot more than a reasonable rate of return.

deleted 9y ago

[deleted]

bunderbunder 9y ago

> part of a person's paycheck goes into a fund that is supposed to support their pension. Yes. In Illinois, that portion is supposed to cover on the order of 10% of their pension, and taxes are (presumably) supposed to cover the other 90%. This figure is including market returns from initial contributions. Bad mishandling may have made the situation worse, but, even if it had been handled perfectly, it still would have been unworkable.