Illinois lawmakers are returning to Springfield Tuesday to vote on a proposed pension “deal.” The proposal is being billed as harsh reform, but in reality will not solve the pension crisis and at best, takes Illinois’ pension crisis back to 2011 levels.

One component of the deal is a change in the way cost-of-living adjustments are calculated for current retirees, which is being billed as harsh medicine for government workers. But an analysis by the Illinois Policy Institute finds that despite these proposed changes, Illinois taxpayers would continue to pay out cost-of-living adjustments to millionaire pensioners – with questionable savings.

Consider this example:

• Henry Bangser retired in 2007 from his role as superintendent of New Trier Township High School District in Wilmette, in suburban Chicago.
• At retirement, Bangser was 57 years old and had 34 years of service.
• Bangser currently receives an annual pension of $277,617.
• According to the Teachers’ Retirement System, Bangser contributed just $336,612 to his own retirement fund over the course of his 34-year career.
• Without the so-called reforms, Bangser would have collected approximately $8 million in pension benefits over his lifetime.
• Under the so-called COLA reform, Bangser will collect nearly $7.2 million in pension benefits over the course of his lifetime – more than 20 times what he paid into his own retirement fund.

“If Illinois is serious about reforming cost-of-living adjustments – one of the largest drivers of Illinois’ growing pension debt – then it will stop paying COLAs to millionaire pensioners and pay this benefit only to career, government workers who need it most,” said Ted Dabrowski, vice president of policy at the nonpartisan Illinois Policy Institute. “The bottom line is that this bill isn’t reform – it’s a lot of smoke and mirrors to fend off the political pressure for reform.”

Illinois should consider completely freezing COLAs until the pension systems are in better financial shape. Doing this would cut the unfunded liability of $100 billion by roughly one-third. Or at minimum, Illinois should means-test cost-of-living-adjustments so that they are provided to workers who dedicated their full careers to public service and have annual pensions below $30,000 – not the millionaire pensioners making six-figures every year. Means-testing COLAs would protect Illinois’ most vulnerable state retirees while achieving necessary cost savings.

Pension experts are available for interviews by phone, Skype and in-person in Chicago and Springfield. 

FOR INTERVIEWS: Diana Rickert (312) 607-4977