It's archaic and should be changed, but the way the system works in the U.S. is pretty well known to its citizens, which makes it at least partially the fault of the pensioners. I live in Chicago and every retired schoolteacher and police officer I meet knows full well that they're making an exceptional amount of money in retirement. It's usually part of why they took the job.
IMO, it's no more the pensioners' fault than any other voter. If they're a resident eligible to vote, it's partly their fault. It's not their fault for accepting a job offer with certain terms broadly available.
(1) Pension decisions play out potentially over ~30-40 years.
(2) If we accept that the cause is some official made a bad decision, it is almost certain that pension issues will be ongoing. There is potentially a 40 year window for idiots to get in and screw the whole system up.
So in a sense, some large group of people need to be responsible. Not because it is fair, but because if that isn't how we treat the situation it isn't likely to get fixed for the next round of pension crises. The pensioners were most invested in the success of the enterprise. They are most responsible for its failure.
This isn't a nice position to hold, but the alternatives are a very nebulous concepts of blame and lumping the cost of fixing all the mistakes on the one group of people who we know weren't responsible - people who are currently entering or in the workforce and can pay taxes.
Except that’s not how responsibility works. They may be the beneficiaries of a broken system, but they aren’t necessarily — and certainly not solely — the ones that broke it.
Just phase them out and switch to 401ks. It’s absurd that such a large portion of government budgets are retirement accounts.
The problem when you say “just phase them out” is what to do with the trillions in outstanding obligations. For example, pension benefits are protected by the Illinois state constitution. You can imagine the process you’d need to construct and execute to fix pensions in Illinois, Cook County, and Chicago’s cases.
The unwinding is the terribly difficult part because the can keeps getting kicked down the road due to a combination of greed and incompetence. You need back pressure from financial markets to inhibit borrowing for what can never be paid back. Then the hard conversations are forced.
There's a finite time that benefits are paid out. At most, it's the maximum lifetime of the retired worker or their spouse. At some point, the workers and their spouses will be dead. They're beneficiaries do not, nor have they ever gotten a pension.
You simply stop giving new workers pensions, and you offer buyouts to the existing workers. None of this is fast, nor did I say it was. Even if you did it today, we're talking probably at least another 50 years before the last pension is paid out. Meanwhile, You're still dealing with the problems of running a pension plan, but at least you're on a path to divest from them.
This strategy is basically what every old company with pensions is doing. The problem here, is that governments don't do it, in large part due to the unions. I don't blame the unions for insisting on pensions, they're a good deal if you've got one But the fact is they're unsustainable. Unlike a company, the government is never going to go out of business, it's just going to become a retirement plan with a police force.
I tend to agree, but there's a limit. Accepting a job where the payout promised requires an almost 50% property tax raise? You can't possibly claim surprise when those promises are reneged on.
A lot of the people paying these taxes never agreed to the other end of the bargain either? I mean, you can argue that this is an integral part of the social contract, but if everyone leaves Chicago because property taxes increase astronomically there won't be any tax payers to lecture about how they have to hold up their end of the one-sided bargain. And then the whole thing collapses anyway?
When you move to or live in a city, you sign on to the things the city did/does. That you didn't personally agree to build a new library or hire Sally Jane as a Police Dispatcher is irrelevant.
I think people are leaving Chicago over solvency/funding outlook issues. I have two barely wealthy (single digit millions, almost surely) friends in Chicago who are moving to Arizona and Texas because they worry they're among the juiciest targets to be squeezed in the upcoming years.
I view it in the same terms as an elected official who willfully courts lobbyists or something else legal, but still distasteful. Members of those pension classes have known forever that their pension amounts would bleed the city dry, but they went along with it anyway. It's technically not their fault, but only in a dry legal sense. They knew they were leaving the rest of us in a bad state.
