Pension misinformation in the news; no wonder the old line press is dying

It’s not difficult these days to get the facts about the governmental boondoggles like the State of Illinois’ pension systems. So, you would think the media would take the time to do some research before it prints a story.

More understandable – though just as inexcusable – is when members of the public rely on the media to bring them the correct information. A letter to the Daily Herald editor is a case in point. One writer complained about “the legislature’s gross mismanagement of the public pension system” that “borders on the criminal.”

The letter writer cites the unfunded liability of $130 billion. What he doesn’t realize is that the number is probably much higher, and that only a fraction of that is the fault of the Illinois General Assembly. When salaries, promised pensions, and the pretend 8% return on investment are factored in, those expecting to receive those pensions are at fault for not paying more into the system.

And the notion that the Illinois General Assembly is supposed to be managing the system is silly. The reality is that those who expect to receive those bloated taxpayer funded pensions are responsible to oversee the management of their own money.

In another newspaper article during the same week about the state pension funds selling assets to cover expenses, the blame is once again put on the Illinois G.A. as if it deserves all of the blame for the system’s deficit.

At some point I would love to read that state employees – especially teachers – have finally done their homework and are admitting their own dreadful mistake. Personal responsibility means we’re all responsible for our own retirement years. It’s pretty clear that future recipients of Social Security are increasingly aware that to count on S.S. as their sole source of income when the time comes to retire is foolhardy.

For the sake of simplicity – this column is going to begin a review of the last several columns of “What the next governor should do” segments by pension expert Bill Zettler.

First – let’s start with some information from Bill Zettler’s writing that gives a very simple statement regarding exactly why the system is teetering on bankruptcy:

If you listen to union representatives and their lackeys in the media you will hear this constant refrain: Illinois pension problems are the direct result of the taxpayers not paying their fair share over the last 15 years. This is patently false.

The problem with Illinois public pensions is the result of the “Four Rules of “Too”:

1. Public employee salaries are “Too” high.

Teachers’ salaries rise twice as fast as private sector salaries.

2. Public employee contributions are “Too” low.

3. Public employee pensions are “Too” high.

Teachers contribute less but get 3 to 7 times more pension than Social Security workers.

4. Public employee retirement is “Too” early.

Taxing for Fire and police services are for the common good, taxes for highways and sewer and water are for the common good. But $130,000 pensions for 56-year old public employees serve no common purpose only a political one. And that represents a political system we can no longer afford or tolerate.

Click to read the entire article “The Four Rules of “Too”: The Real Reason Why Illinois Pensions Are in Trouble” and learn the facts.

Up next: What should the next governor do? It’s not a mystery.

©2010 John Francis Biver