Because of an inability to resolve the pension crisis, Moody's Investors Service has stripped Chicago of its investment-grade status. Illinois's credit rating is now junk. The State's bonds status is essentially worthless. Illinois is nearly Bankrupt.
Republican Gov. Bruce Rauner and the Democrat-dominated legislature have not put forward a plan to reduce our pension benefits obligation. JB Pritzker has indicated he is fine with things just the way they are.
My running mate Jim Tobin and I insist we need a Constitutional Amendment to address the more lavish pension obligations to the Pension Millionaires.
We would not take any action that hurts the average existing pensioner. We currently have a defined benefits plan which is wholly unsustainable. Our Accrual multiplier per year of service is currently 2.2. Ideally, we should have an Accrual multiplier per year of service equal to 1.0. This disparity makes our current pension situation tenuous. We must ultimately transition to a defined contribution plan which will allow the future benefits to fluctuate according to investment successes.
We must adopt a common sense approach that is fair to current and future pensioners as well as taxpayers.
I support the state initiative to raise the retirement age, which previously allowed public employees to retire as young as 50 in some government pension systems and 55 in others.
We should weigh and assess the benefits of offering certain government employees the option of a one-time lump sum payment.
We can replace the automatic 3 percent annual increases for government retirees with a capped, inflation-based cost-of-living factor and tax the pensions of non-residents who retire from work in the private sector, with an exemption for the first $75,000 in retirement income and enact a minimum age for the exemption.
Finally, we must implement a Full accrual system which would mandate that we pay our obligations as we go within the year in which they accrue.