Thursday, September 1, 2016

Fight Between Public and Private Sector Will Worsen In Coming #Crisis #Illinois

News
Rouner, the relative new and free-thinking governor of Illinois, attempted to prevented a lowering of expectations for pension fund earnings from 7.5% to 7%. This cut would have forced Illinois to either raise taxes, a taxpayer guarantee of public sector benefits, or cut services from $400 to $500 billion to cover the short short-fall. The problem of funding pension fund shortfalls is not limited to Illinois (123, 4).

The battle between public and private interests, the 'saving' of public pension through taxation while private pensions pains remain subject to downgrade or failure, will only exacerbate the rising social tension as the global economy enters liquidation in 2017. Raising taxes to save public pension while roads transition from pavement to minefields of potholes and cracks and the breadth of public service decline won't sit well with the majority of taxpayers.

Headline: Rauner loses $400 million vote on teacher pension fund issue

Gov. Bruce Rauner on Friday unsuccessfully waged a last-minute battle to block the Downstate and suburban teacher pension system from making a move that puts cash-strapped state government on the hook for hundreds of millions of dollars more in the short term.

At issue was whether the Illinois Teachers Retirement System board should lower expectations about how much the fund might earn in the stock market. For the past two years, TRS has assumed that its investments will earn an average rate of return of 7.5 percent. But this time actuaries argued the figure should be lowered to 7 percent, given widespread belief that retirement funds won't continue to perform as well as they have in recent years.


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