piggybankIllinois is facing a looming retirement crisis. Half of Illinois' private sector workers — 2.5 million people — lack access to employer sponsored retirement plans. Researchers estimate that nationally our retirement savings deficit is between $6.8 and $14 trillion.

Yes, trillion.

This is a huge crisis, approaching us with terrifying speed. If we don't do something about it, we'll be facing an epidemic of seniors living in poverty, with horrific human consequences, not to mention huge costs to government.

Fortunately, there are commonsense ways to address this. That's why I spent the last two years working to pass the Secure Choice Retirement Savings Program in Illinois. It creates an automatic enrollment IRA so that workers without employer sponsored retirement plans still have an easy way to save for retirement using a payroll deduction and benefiting from low fees.

Read more: BLOG: Retirement savings bill passes the General Assembly

Category: Pensions

Pensions are in trouble in America. For more than three decades, private employers have been shifting away from traditional pensions and adopting 401(k)-style plans. A handful of public employers have done the same, and other governments are being pressured to follow suit.

chart

Those who advocate that we should abandon defined benefit pensions typically say that they're unsustainable -- and their primary evidence is that public pensions funds are deeply in debt. The truth of the matter, though, is that a defined benefit pension system can be perfectly sustainable if managed properly, and that most of our pension problems result from mismanagement. This mismanagement has taken many forms (including the use of inappropriate assumptions about investment returns and mortality, tolerance of abuse, and granting of unfunded or retroactive benefit enhancements) but by far the most common, most tempting, and most easily avoidable one is deliberate underfunding.

Read more: BLOG: Bad News For Pensions

Category: Pensions

pensionsI must get the question 10 times a week: why don't we move public employees out of defined benefit pension systems and into defined contribution plans like a 401(k)?

It's a natural question, given the rapid movement away from defined benefit pensions in the private sector that began in the late 1970s and continues to this day (see figure below). It's also a complicated question, and one that deserves a careful and thoughtful answer. This blog post constitutes my attempt to provide such an answer.

Read more: BLOG: Why Don't We Shift Public Employees from Pensions to 401(k)s?

Category: Pensions

Contact Me

District office:
3706 Dempster St.
Skokie, IL 60076
(847) 568-1250
(847) 568-1256 FAX

Springfield office:
417B Capitol Building
Springfield, IL 62706
(217) 782-2119

Email:
senatorbiss@gmail.com

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