I was playing golf this summer and my playing partner Jim asked me how I liked retirement. I told him it was great, and since Jim was about my age I asked him when he was going to retire. His response was, “I have to keep working so I can pay for your pension.”
I get this a lot – friends who have heard about Illinois’ pension crisis and somehow think it’s my fault. They don’t want to hear that 10% of my salary was automatically put into the pension system for the past 35 years. They don’t want to hear that two-thirds of the pension system’s revenues (2013) came from its investments and member contributions, not the state.
So how much did Jim “pay” for my pension last year? According to TRS (Teacher Retirement System) 32.4% of its revenues in 2013 came from the State of Illinois. So that means for every $10,000 of my pension, $3,240 came from the state of Illinois.
Now according to the US Census bureau in 2013 there were approximately 9.9 million people in Illinois over the age of 18 (i.e. taxpayers like Jim). Dividing the $3,240 that came from Illinois by 9.9 million taxpayers, that means each taxpayer contributed $.0003 per $10,000 of my pension. According to TRS, last year the average pensioner received just under $50,000, or about $1.6 tenths of a penny per Illinois taxpayer.
So next time Jim complains about having to work to pay for my pension, I’m going to toss him a nickel – that should be more than enough to cover his contributions for the next 15 years. Maybe now he’ll retire.