The Flounder Pension

We don't talk nearly enough about the looming public-sector pension crisis. More importantly, when we talk about it, we aren't serious. Consider what's happening in our favorite cautionary tale state, Illinois. Walter Russell Mead explains:

It didn’t take long for Illinois public employee unions to demand that the courts declare arithmetic invalid. Barely two months after the state legislature passed a modest but much needed pension reform bill increasing the retirement age and slowing annual cost-of-living increases, a confederation of Illinois’s biggest public sector unions have filed a lawsuit.

Consider some of the math involved, as detailed in a story in the Chicago Tribune:

The lawsuit alleged the changes foisted upon public employees are “substantial and will grow in magnitude over the course” a person’s retirement, a point that underscores why the new law is “unconstitutional and unfair.”

By way of example, the lawsuit highlighted the cases of 25 active and retired government workers. One was Chicagoan Lee Ayers, who has worked about 25 years as a clinical lab technician at a state university and expects to get an initial pension of $53,366 when he retires in 2019. Under the new law, he would lose more than $218,000 if he spends 25 years in retirement, the lawsuit contended.

Mead states what should be obvious, but apparently is not:

Thirty years of work in exchange for twenty-five years of paid retirement is simply a chimera. It doesn’t even really matter how desirable or objectionable we think such an arrangement would be; the arrangement itself is financially impossible. Public employees who are promised such lavish deals should be extremely wary. The unions and politicians making these promises have no way of paying for them.

You can see a dramatic reenactment of Ayres discussing his pension with his union representatives in this video (NSFW):

Actually, this put-upon Ayres fellow might get his money paid in full, but it would be in dollars that have the value of Turkish lira. So he's got that going for him.

As Mead puts it, the unions in Chicago have declared war on arithmetic. It will be interesting to see if the judges in Sangamon County are as innumerate as the unions appear to be.