No business or government can remain solvent with such rapidly growing obligations, especially when that growth overwhelms any ability to pay for it. In fact, Illinois pension benefits grew the third-fastest in the nation between 2003 and 2015. Kentucky, which is suffering a massive pension crisis of its own, was the only nearby state with pension growth similar to Illinois. Its benefits grew 7.4 percent annually between 2003 and 2015. Still, the annual pension growth rate in Illinois was far greater than in larger states such as California’s annual growth rate of 6.6 percent. Other examples are Florida’s pensions which grew 5.6 percent, New York saw a 5 percent jump and Texas was up 4.9 percent.

Since 1987, Illinois Benefits Have Soared 1,061 Percent

From 1987 to 2003, pension benefits in Illinois grew at an uncontrollable yearly rate of 10.1 percent. We should note that small differences in growth rates add up to big amounts over years and decades, for example, the variance between 5 percent and 9 percent over a 30-year period can make the difference between a crisis and a stable situation. Consider how an 8.8 annual growth rate would affect average household incomes, over a 30-year period. In 1987, the median household income in Illinois was $27,084. If household incomes had grown at the same rate as state pension benefits they would have grown to $314,000 by 2016.

We were often led to believe pensions are a promise carved in stone, however, when the money is not there pensions and promises will be broken so pensioners should prepare for the pain. This is especially true in the public sector which has a history of granting pensions that are unheard of in the private sector. The 25 largest U.S. public pensions face about $2 trillion in unfunded liabilities. If Americans took the time to stand back and look at the bigger picture they will see the Pension Benefit Guaranty Corporation (PBGC) an independent agency of the United States government responsible for acting as the nation’s “safety net” for failed pensions is also in trouble. When a fund fails this agency is expected to take control of its assets and dole them out to its pensioners in the coming years. The ugly truth is the PBGC is not a rock and is in need of its own bailout. This so-called government agency “independent or not” has total liabilities of $164 billion with assets of only $88 billion.