Pension Reform

Suburban Government Pensions Smothering Taxpayers

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Chicago, IL—Taxpayers United of America (TUA) today released the results of their study of the government pensions of municipal and government school retirees for Des Plaines, Elk Grove Village, Glenview, and Schaumburg.
“More than 1,000 of the government pensioners in these four communities alone each receive greater than $100,000 per year in pension payments, and greater than 2,500 collect pensions between $50,000 and $100,000 annually,” stated Jim Tobin, TUA president. “The pensioners’ average personal investment is only about 5.3% of their lifetime payouts.”
“The government pensions are unsustainable. Illinoisans continue to see services cut, programs defunded, and their earnings confiscated as tax dollars are diverted from services required by today’s taxpayers into the pension funds for government employees whose services were rendered long ago.”
“These lavish government pensions are political tools for politicians and union bosses and sustaining the defined benefit system will only be a detriment to employees and taxpayers in the future. On average, these gold-plated retirements begin at the age of 58. The retired government teachers alone average over $2.2 million in lifetime pension payments! The ballooning unfunded liabilities are smothering Cook County taxpayers, and all of Illinois, for that matter.”
“These ‘poor public servants,’ who collect more in pension payments than the taxpayers who fund them, enjoy nearly iron-clad job security and guaranteed increases in wages and retirement. This is theft. This is immoral and unethical theft of taxpayers’ hard-earned money to be given to the political elite. Putting vast sums of money in the hands of bureaucrats and politicians is always a frightening idea,” said Tobin.
“Schaumburg fire and police pension funds are some of the largest in the state and at 58.1% and 53.9% funding ratios, respectively, they illustrate the dire need for immediate and sweeping reforms to remove this unbearable tax burden from the backs of hard-working taxpayers. Because when the pension funds run short, and they will, and someone needs to make up the difference, who will be left on the hook for these exorbitant government pensions? The taxpayers.”
“There are now well over 12,154 Illinois government pensioners collecting more than $100,000 and 85,893 government pensioners collecting more than $50,000 annually! These numbers only pertain to the state pension funds and don’t include any of the hundreds of local police and fire pension funds. Those are staggering numbers, considering the taxpayers who fund these government pensions get an average Social Security pension of only about $15,000 a year.”
“Retired Schaumburg CCSD 54 government employee, M. Moshin Dada enjoys an annual taxpayer funded pension of $262,341. Over a normal lifetime, he will get about$8.8 million in pension payments. His personal investment in his rich pension is about4.2% or $371,514 – less than two years’ of the government pension benefits he collects!”
Thomas J. Richardson retired from Glenview Park District and his current annual pension is $130,322. He will collect about $4.2 million, while he only put in $112,977 of his own money, less than one year’s pension payout. That’s a 2.7% investment in his own multi-million dollar retirement payout!”
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“I defy teachers, or any government employee, to look into their neighbors’ eyes and say, ‘You deserve another pay cut so I can make more in retirement than you make working.’ They have to be able to say to their neighbors, ‘I don’t care if you can no longer afford your home property tax payment; I want more. I want more of your money. I want more of your wealth. I want more of your property.’ That is the reality of demanding more lavish government pensions,” challenged Tobin.
“The best solution for government pension reform in Illinois, although difficult, would be the repeal of the Illinois Constitution’s pension provision protecting them from being ‘diminished or impaired. In the meantime, the Illinois General Assembly should increase individual government employee contributions to their own gold-plated pensions by 10 percentage points. This would save taxpayers about $150 billion over the next 35 years, or about $4.3 billion a year, and save the State of Illinois from financial ruin.”
“Right now, most government school teachers don’t pay the 9.4% required contribution to their own pension, and many school districts pay a portion or all of the teachers’ pension contribution. Having employees make the required contribution would save taxpayers roughly $500 million annually. And if all else fails, there is always the option of moving forward with legislation to begin the process of allowing municipalities and government schools to file for Chapter 9. Taxpayers must pursue these paths forward and any other options that reverse the course toward disastrously higher taxes in the immediate future,” said Tobin.
“Rather than finding ways to perpetuate this horrible system that places copious amounts of cash in the hands of bureaucratic hacks, rank and file government pensioners should be calling for the complete reform and conversion to 401(k) style defined contribution pension funds that place employees in control of their own futures. How many times will we trust politicians to do the right thing with the money collected for pensions? How many citizen groups will ‘discover’ that you just can’t tax your way out of this problem?”
“The choice is clear: without sweeping, meaningful pension reform, residents of Cook County suburbs and nearly every other city in Illinois will have to choose between fully funding the pension systems to pay for past services rendered, or pay for the services we need today,” concluded Tobin.
*Lifetime estimated pension payout includes 3% compounded COLA and assumes life expectancy of 85 (IRS Form 590).

Chicago Teachers Union Threatens Strike: For the children or the tax dollars?

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CHICAGO — Chicago Teachers Union (CTU) President, Karen Lewis, and Vice President, Jesse Sharkey, warned CTU members this past Monday to begin saving at least twenty-five percent of their pay “to weather what could be a protracted strike.” This Thursday, November 5, CTU will conduct “an official ‘practice’ strike vote and contract poll in all CPS school buildings,” further setting the stage for an actual strike in the coming months.
Taxpayers United of America’s (TUA) director of operations, Jared Labell, calls CTU’s brazen threat to strike both wildly misdirected and counterproductive for solving the financial fiasco in the Chicago Public Schools, Illinois’ most beleaguered school district.
“Karen Lewis led CTU’s last strike in 2012, declaring it a victory for teachers and students. But even by CTU’s standards, it’s difficult to see how they consider thousands of laid-off teachers and employees, plus dozens of shuttered schools in the interim three years a success, and that’s all prior to the newly proposed cuts by CPS CEO Forrest Claypool, which would take place in early 2016,” said Labell.
CTU has prepared for a possible strike since their contract expired June 30.
Revived talk of a teacher walkout comes mere days after the Chicago City Council approved Mayor Rahm Emanuel’s historic three-quarters of a billion dollars tax increase, which included an unprecedented property tax hike totaling $588 million dollars to fund the Chicago police and firefighter pensions, and pay school construction costs. But even with the historic property tax hike and other fee and tax increases, the infusion of taxpayer dollars will not approach the billions of dollars needed to correct Chicago’s financial footing.
Yesterday, the Chicago Tribune reported that nearly three dozen Chicago high schools are less than half full, which represents an extremely costly problem for CPS in terms of property holdings, maintenance, and administration, but it is simply business as usual for the government unions and their fellow travelers. Every once in a while, however, even they will admit that the system is unsustainable when held to the same standards as found in the free market:

“You have to administer a building, whether a school has 20 kids or 2,000 kids, you got to have a principal. School districts have a lot of fixed costs,” Charles Burbridge, executive director of the Chicago Teachers’ Pension Fund, said during a recent meeting of the Tribune’s editorial board.

“It’s like, I often say, look at school districts, and essentially they’re like a hotel chain. If you’re not running 80 percent capacity and utilization of your hotels, you’re going out of business,” he said. “Well, CPS is not running 80 percent capacity in its hotel, and it can’t go out of business.”

“The fact is, CTU leadership have been awful stewards of the Chicago Public Schools and their students. The union bosses continue to push for raises and lax performance evaluations in the face of abysmal academic progress for students, ballooning debt, and profligate spending, all the while resisting reforms to their bureaucratic fiefdom and their lavish taxpayer-funded pensions,” said Labell. “And I don’t think CTU will win over many parents of students by approaching the situation as they have. The Chicago Public Schools are basically a government monopoly, top-heavy with exorbitant salaries, gold-plated pensions, and redundant bureaucracy, but they don’t seem to reconcile that with the financial reality average students and families are facing.”
Chicago teachers receive an average salary of about $70,000 annually for nine months of employment, while the per capita income for Chicagoans is less than half of that, and nearly a quarter of the city is below the poverty level.
“My heart goes out to the least affluent families in Chicago, who have little choice in competing educational alternatives. These families are forced to hand over their hard-earned money in the form of property taxes to fund the vast government-education empire housing Chicago’s children like prisoners,” said Labell.
“Perhaps taxpayers should counter CTU’s threat of a teacher strike with a taxpayer strike. If CTU and CPS are not onboard to enact significant structural changes to the heavily indebted and liability-laden district, then Chicagoans should stop enabling them with taxpayer dollars, like one would stop funneling whiskey to a drunk. The question is how badly Chicagoans will feel once the party is over and the well is dry, because either way, the hangover is coming. It’s only a matter of when,” concluded Labell.

Vermilion County First|Watchdog Group Cites Vermilion County Pensions

President of Taxpayers United of America, Jim Tobin, was quoted by Vermilion County First during the pension release of Vermilion County.

A government watchdog group is citing some Vermilion County government pensions as examples of what it calls over-inflated pensions.  Taxpayers United of America President, Jim Tobin, says many Vermilion County government retirees are enjoying seven-figure life-time pension payouts.  ‘’Well over 1,000 of Vermilion County area government pensioners receive million-dollar life-time pension pay-outs.  The pensioners average personal investment is only about five-and-a-half percent of the life-time pay-outs,’’ says Tobin.
‘’While local taxpayers, whose average household income is about $41-thousand dollars, struggle to make their property tax payments – working well beyond retirement age – these government pensioners enjoy lavish, gold-plated retirements beginning, on average, at the age of 58,’’ says Jim Tobin.  He is the president of Taxpayers United of America, which released the report.  Taxpayers United of America is urging state lawmakers to do away with what it calls over-inflated pensions.
Tobin made his comments during a news conference in Urbana.  He added the state will soon have to start reducing pension payments, due to a lack of funds.  But he could not pinpoint when that is expected to happen.
Tobin thinks the pension payouts to many Illinois government retirees is outrageous.  ‘’I think taxpayers should be outraged as I am that these people are retiring in their fifties and sixties and living the ‘Life of Riley’ on our dime.  We have to keep working into our sixties and seventies, and in some cases we have to work until we drop – we taxpayers – so these people can retire in their fifties and live the ‘Life of Riley’ on our dime,’’ added Tobin.
More information on the study conducted by Taxpayers United of America on pensions in Vermilion and Champaign Counties can be found at


Taxpayers United Of America: (TUA). is a nonpartisan, 501(c)(4) taxpayer advocacy group. Founded June 27, 1976 in Chicago, Illinois by activist and economist Jim Tobin, TUA works on behalf of taxpayers to reduce local, state, and federal taxes. In the past forty years, TUA has saved taxpayers more than $200 billion n taxes and has become one of the largest taxpayer organizations in America. Check All posts. s.


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