From the Daily Southtown (Editorial):

State must tighten rules on pensions

December 6, 2006

Last week's news that a state panel stripped former Gov. George Ryan of his $197,000 pension because of his racketeering conviction was somewhat overshadowed by the appellate court decision allowing Ryan to stay out of prison while he appeals that conviction. But it's worth noting, because Ryan's huge pension highlights the need to reform a public retirement system that has been underfunded for 30 years and is threatening to eat up an ever-bigger share of state revenues.

Ryan's long tenure as an elected official and quirks in the state pension laws allowed him to qualify for an annual pension that significantly exceeded the $150,691 salary he made as governor. Many of those quirks have since been fixed, and in Ryan's case -- assuming his conviction is upheld -- it's moot anyway because the General Assembly Retirement System board rejected his argument that he should retain the part of his pension from his early years in government that were untainted by corruption. But not every loophole has been closed.

Former Cook County Board President Bobbie Steele exploited one of those when she retired last week. She served for 20 years on the board, and had she retired as a commissioner her pension would have been $68,000. By retiring as president, however, she can base her pension on the higher president's salary and draw a pension of $136,000 a year -- though she only held that post for four months.

Of course, most state and Cook County residents -- who are paying for those big pensions -- won't see such a windfall when they retire. And the state and county can't afford such generosity.

During the current fiscal year, the state's five public retirement funds will have an unfunded liability of nearly $45.8 billion. Cook County has an unfunded pension liability of more than $2 billion. Meeting those pension obligations won't be easy, and it could come at the expense of schools and other essential state and local programs.

Some efforts have been made in the last few years to address the problem, particularly at the state level. And Cook County Commissioner Forrest Claypool and state Rep. John Fritchey have proposed to close the loophole used by Steele. But it's not enough. In an October report, the Civic Federation recommended some sensible proposals, including a moratorium on new pension benefits, requiring an extra 1 percent contribution by state workers, studying a shift to a 401(k)-like plan and using proceeds from sales or leases of state assets to pay down the debt. The problem will be solved by officials who follow that advice and not Ryan's and Steele's examples.

This represents the view of Sun-Times News Group newspapers in metropolitan Chicago.