Retired College Teacher With $152,000 Pension Claims Pension Reform is Theft

Michael Corn, a retired college teacher, recently wrote a letter-to-the-editor at the Daily Herald equating the unfunded Illinois pension system with theft. And I agree it is theft but I would argue the thief is the public employee not the legislature or taxpayer as Mr. Horn claims. 

Mr. Corn laments that he paid 8% for his pension and for that unholy contribution he feels he has earned his $12,707.59 monthly pension or $152,490.84 per year. Mr. Corn paid his 8% for all of 31 years too. Wow that’s impressive. The rest of us have to work 40 or 45 year careers in order to get our pension (Social Security) at age 62 or 67 respectively. But then again teachers are special. 

Now the greedy private sector taxpayers, the weirdo 95% of citizens without state pensions, who are responsible for paying for Mr. Corn’s $152,490.84 annual pension, contribute 6.2% to their own pension (called Social Security) and at age 62 after 40 years of contributions can take down a huge maximum pension of $22,260 annually or about one-seventh of Mr. Corn’s annual pension. So Mr. Corn contributes at a rate 22% higher but for 9 fewer years but receives 7 times the pension. And Mr. Corn retired earlier too at age 59. What a terrible deal for Mr. Corn. No wonder he is complaining. 

Mr. Corn also complains that regarding state contributions the state i.e. the taxpayers promised thusly: “we, the state of Illinois, will contribute a similar amount (similar to the employees) as all employers do”. The implication being that we the taxpayers, via the “state” did not make our contributions. 

This is a familiar litany we hear from public employees all the time: we made our contributions, measly though they are, while you have not made yours. This is of course not true as we have written here many times before. As you can easily see by the following table since the 1995 pension funding law went into effect (in 1996) taxpayers via the state have contributed 90% more than the employees like Mr. Corn have contributed. 

     
StateUniversityRetirement System
     

YEAR

 State Contribution

 Employee Contribution

1996

                    147

                    197

1997

                    182

                    202

1998

                    228

                    222

1999

                    238

                    213

2000

                    241

                    223

2001

                    247

                    222

2002

                    256

                    252

2003

                    285

                    246

2004

                1,757

                    244

2005

                    285

                    252

2006

                    180

                    253

2007

                    261

                    262

2008

                    345

                    264

2009

                    452

                    273

2010

                    696

                    275

2011

                    774

                    260

 

 

 

Sub-Total

                6,574

                3,860

Pension Bond Interest

                    800

 

 

 

 

Total payments

                7,374

                3,860

 

 

 

So I guess they did lie since Mr. Corn claims they were responsible for contributing a “similar amount” when they actually contributed 90% more.Although I am not sure why anyone would complain about the state contributing more. 

I think most reasonable people would agree that a pension 7 times another pension should have contributions much more than 8% versus 6.2%. In fact I would equate that huge difference to theft especially since the poorer party with the much lower pension has to pay for the higher pensions via the higher taxes proposed by Mr. Corn. Assuming a very reasonable doubling of contribution for 7 times the value Mr. Corn’s contributions should have been at least 12.4% and probably much more. That means Mr. Corn owes us taxpayers about $96,000. Plus interest at 8.5% of course. 

So Mr. Corn, when can we expect your check? After all the pension systems are running out of money and you obviously have not paid your fair share.

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