Wednesday, April 16, 2014
Julie Roin (Chicago) presents Planning Past Pensions at Duke today as part of its Tax Policy Seminar hosted by Lawrence Zelenak:
Evidence of state and local government dysfunction surfaces in many areas. One is the operation of their employee pension plans. Free from the strictures of ERISA, some governments failed to fund their pension promises and with the imminent retirement of the baby boom generation, are facing what appear to be insurmountable pension debts. The state of Illinois is one of the worst-hit states, with grossly underfunded pension plans, a state constitutional prohibition on reducing pension benefits, and a sizeable non-pension related budget deficit. Recently passed pension “reforms” likely will be struck down by its courts. There are no easy solutions to its pension woes, but this article seeks to lay out a few steps that Illinois can take now, under current law, and suggests more long-term policy and legal changes that it should consider for the future. Ultimately, though, the same dysfunctions that led to the current crisis might make these suggestions impractical.