The architect of a plan to buy out a portion of state retirees’ raises defended the program after a report found it saved the state about $13.1 million, far short of the $445 million it was expected to save the state this year.
A report from the Civic Federation found the plan to offer retiring state pensioners a buyout of a portion of their annual raises in retirement had saved the state little more than $13.1 million. Former Gov. Bruce Rauner had estimated it would save the state an estimated $445 million this year.
State Rep. Mark Batinick, R-Plainfield, who crafted the buyout legislation, said the program wasn’t fully implemented and that Rauner’s administration overestimated the projected savings to shore up the state’s budget.
“We basically gave the systems a month where it’s probably closer to a year for implementation,” he said. “And, there were some large numbers being thrown out, fairly callously, just to put up a placeholder in the budget to make it technically balanced.”
Only one of the state’s retirement funds, the State Employees’ Retirement System, was implemented, which Batinick said resulted in the savings he and others had predicted.
“SERS, who had the easiest job of implementing it, had the exact take-up rates that we were expecting,” he said.
He said the savings from the buyout program are likely to be seen in the next couple of years. Even if it met the estimated cost reduction, Illinois has more than $136 billion in unfunded pension liabilities.
Critics of the buyout program had said it was too small of a solution for too big of a problem. They noted that the state had to borrow those funds at a higher interest rate because of Illinois’ poor credit rating.
