Illinois Pension Law Under Financial Scrutiny
From the Chicago Tribune
When Illinois lawmakers narrowly approved major changes to the public employee retirement system last month, supporters touted the measure as saving $160 billion over 30 years.
While that estimate was more than a back-of-the-cocktail-napkin figure, the final version of the pension law is now being scrutinized by several other number crunchers to see if the math adds up.
The individual state pension systems and the legislature's budget forecasting agency have tapped financial experts to take a look. And ratings agencies such as Fitch, Moody's, and Standard & Poor's are engaged in their own examinations into how the pension law fits into the state's overall financial picture.
What emerges from those analyses in the coming weeks will help shape Wall Street's reaction, which goes a long way toward determining whether Illinois will get a boost to its bad credit rating and avoid hitting taxpayers with additional interest charges when the state goes to borrow money.
"The ratings agencies, they tend to be fairly quick to downgrade and fairly slow to upgrade," said John Sinsheimer, the point man on the pension issue for Democratic Gov. Pat Quinn. "They want to make sure that whatever changes you put in place are going to take hold and take effect."
Sorting out the financial impact is complicated, given the large number of changes in a law that will affect hundreds of thousands of state workers, university employees and public school teachers in classrooms outside Chicago. The law raises retirement ages, cuts cost-of-living increases and allows some workers to move into a 401(k)-style retirement plan, among other things.
Read more in our daily News Update...
From the Chicago Tribune
When Illinois lawmakers narrowly approved major changes to the public employee retirement system last month, supporters touted the measure as saving $160 billion over 30 years.
While that estimate was more than a back-of-the-cocktail-napkin figure, the final version of the pension law is now being scrutinized by several other number crunchers to see if the math adds up.
The individual state pension systems and the legislature's budget forecasting agency have tapped financial experts to take a look. And ratings agencies such as Fitch, Moody's, and Standard & Poor's are engaged in their own examinations into how the pension law fits into the state's overall financial picture.
What emerges from those analyses in the coming weeks will help shape Wall Street's reaction, which goes a long way toward determining whether Illinois will get a boost to its bad credit rating and avoid hitting taxpayers with additional interest charges when the state goes to borrow money.
"The ratings agencies, they tend to be fairly quick to downgrade and fairly slow to upgrade," said John Sinsheimer, the point man on the pension issue for Democratic Gov. Pat Quinn. "They want to make sure that whatever changes you put in place are going to take hold and take effect."
Sorting out the financial impact is complicated, given the large number of changes in a law that will affect hundreds of thousands of state workers, university employees and public school teachers in classrooms outside Chicago. The law raises retirement ages, cuts cost-of-living increases and allows some workers to move into a 401(k)-style retirement plan, among other things.
Read more in our daily News Update...