Letter: Suggestions for solving pension problems
To the Editor:
I retired from teaching after 37 years in the profession and am a member of the Teacher’s Retirement System and the State Universities Retirement System. Pension reform is a coming reality. I would like to propose a compromise solution. This solution would require all parties involved to make some sacrifices. The parties should include employees, retirees, employers, taxpayers and state government.
I would suggest the following:
• Cap all pensions at $110,000. Allow growth in the cap per raises in the cost of living.
• Change the three percent Cost Of Living Adjustment to be the same as the COLA for Social Security recipients.
• Allow the COLA to compound until a minimum pension amount is reached and then end the compounding.
• Have retirees pay Illinois state income tax on their pensions.
• Ask current and new employees to contribute an additional two percent of their salaries to the pension fund.
• Have school districts and state universities pay two percent of their employees’ salaries into the pension fund.
• Equalize the five pension systems to require:
1. The same number of service years to receive full benefits.
2. The same health care subsidies for all systems.
3. The same retirement age for all systems.
• Base all pensions on the average of the last six years of highest six years of earnings prior to retirement.
• Make age 60 (sixty) the minimum age to retire with full benefits.
• Continue the pension program as a defined benefits program. Institution of a 401(k) program would ultimately end the defined benefits program. Since most state employees do not have Social Security (the ultimate defined-benefits program), dropping the defined benefits program would put these employees at a disadvantage versus private sector employees.
Vincent F. McMahon