**An excellent question from a reader: If state pensions were limited to Illinois’ median family income ($57,000/yr) would that solve our pension problem?**

That is seemingly a solution but unfortunately it does not help much. Looking just at the Teachers Retirement System for example – the numbers show a saving of less than 15% in 2010.

The problem is the monthly accrual state employees get: 2.2%/mo for each year worked K thru University and 1.67% for state employees. State employees also get SS. Some state employees such as State Troopers get 3%/yr and can retire at age 50. Politicians get up to 8.5%/yr.

The average teacher works 27 years and gets $45,000 pension at age 57 so the “average” falls well below your limit.

In the private sector if you graduate from college at age 22 you work 40 years before you can get a max. Social Security of $22,000 at age 62 – less than half of what the average teacher gets at age 57 after working only 27 years. In fact less than 1% of retired K-Univ retirees have worked at least 40 years. Less than 10% have worked 35 years. If that average teacher was working under Soc. Sec. she would get about $11,000 at age 62 instead of $45,000 at age 57.

So the real problem we have is that 90% of our retirees were part time employees with part time careers who nonetheless get full time pensions.

So if we limited pensions to 3 times what the retirees Soc. Sec. would be at age 62 that would come pretty close to solving the problem.

Since K-univ only contribute 7.5% of their salary (4% for 96% of state employees) into their pension fund that would still be a very good deal for them.

Who could argue with 3 times what the rest of us can get at age 62?

*Bill Zettler is a free-lance writer and consultant specializing in public sector compensation.*