Illinois Valley Times

State Rep. David Allen Welter (R-Morris) expressed his thoughts regarding pension reform on his campaign webpage.

The crisis in the Illinois pension system stems from the growing backlog of unpaid bills and underfunded pension plans. Illinois has 667 government-worker pension funds for its more than one million workers and retirees.

Approximately 60 percent of state workers are able to retire in their 50s with generous pension packages, including fully paid health care plans. Of the more than 213,000 state retirees, 53 percent may receive benefits of more than $1 million in their lifetimes. Approximately 18 percent of all retirees will receive $2 million or more over their lifetimes.

These defined benefit (DB) plans fail in part because of incorrect assumptions and mortality rates. The investment rates are less than anticipated and the workers don't die as early as they once did.

Welter supports reforms to change the pension plans from a DB to a defined contribution (DC) plan, such as a 401(k). While the Illinois Supreme Court has ruled the state constitution protects current employees' earned and future pension benefits, legislators can negotiate new 401(k)-type pension plans for new employees.

Welter supports Gov. Bruce Rauner's plan to amend the state constitution so it only applies to historically earned pensions. Future earnings and new employee plans could be then be changed to DC plans.

"I believe the right legislative package will include protections for already established benefits, a constitutional amendment to make certain future reform is possible, the shifting of all future work into a Tier 2 plan, and the opportunity for an optional buyout to reform cost-of-living adjustments in return for a 401(k)-style defined contribution plan," Welter said.