Journalist in Residence
After 11 years in the Illinois Legislature, state Rep. Jim Watson, R-Jacksonville, is calling it quits. And, like most lawmakers, he will receive an over-sized pension.
The generous General Assembly pension he will collect underscores how Illinois lawmakers have provided themselves with comfortable retirements with far better investment returns than they could receive by working in the private sector.
Watson’s service as an Illinois state representative will earn him an estimated starting annual pension of $33,191. That pension will grow by 3 percent in compounded interest every single year for the rest of his life. And he can begin collecting this pension at age 55.
It’s a far better deal than what he could get in the private sector. A man buying an annuity from a private broker would need $814,669 in cash at the same retirement age to yield the same annual income as Watson’s estimated state pension.
But Watson has only contributed $92,271 toward his pension, giving him a return more than eight times what he could have received in the private sector.
“Being a legislator is a tough job,” Watson said Thursday during an interview with the Reeder Report. “I think pensions were created in ordered to attract people to run for office.”
After accounting for a 3 percent annual compounded Cost-of-Living Adjustment and life expectancy, Watson could be in line to receive a total pension payout during his lifetime of more than $1.2 million. Based on actuarial data, his life expectancy would be just shy of 80 years.
This year, Illinois taxpayers will contribute $14.2 million to the General Assembly Retirement System. Under new pension accounting rules, the Illinois Legislature's pension system is less than 12 percent funded.
“The state pension systems are an absolute train wreck,” Watson said. “Pension reform really wasn’t on anyone’s agenda until a few years ago. I think the reason for that is that is that legislators respond the concerns of their constituents and we weren’t hearing from them that this was a concern.”