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Public Statements

Issue Position: State Pensions

Issue Position

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Q: What's your view of the state pension systems for teachers and others? Do you support or oppose lower benefits and higher employee contributions? Should pensions be replaced with defined contributions? If not, how do you fix underfunding?

A: State government cannot sustain the funding obligations needed to continue to offer defined benefit pension programs to its employees. The legislature should move to a defined contribution program for all new hires and should require higher contributions from all employees. Defined contribution pensions are the norm in the private sector, and such a program will enable employees to determine whether they want to make higher contributions to their pensions (resulting in higher benefits when they retire) or lower contributions (resulting in lower benefits when they retire).

Q: Illinois has an unfunded pension liability of $80 billion. Should the legislature reduce pension benefits for new state employees and/or require higher pension contributions from current employees?

A: State government cannot sustain the funding obligations needed to continue to offer defined benefit pension programs. The legislature should therefore move to a defined contribution program -- rather than a defined benefit program -- for all new hires and should require higher pension contributions from current employees. Defined contribution pensions are the norm in the private sector, and such a program will enable employees to determine whether they want to make higher contributions to their pensions (resulting in higher benefits when they retire) or lower contributions (resulting in lower benefits when they retire).


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