Pension Buyout Program Falls Short of Anticipated Savings

A pension buyout program, offered to members in the state’s 3 largest retirement systems, has fallen considerably short of the anticipated savings in its 1st year, according to a report.  Buyout savings were expected to reduce the state pension contributions from general operating funds, by over $400-million for the fiscal year, which ended June 30th.  An analysis by a budget watchdog, the Civic Federation, shows that the buyouts have only produced around $13-million in general funds savings, which would emanate from the state employees’ retirement system.  Last year, former Governor Bruce Rauner included the program in his 2018 budget, without submitting the plan through a pension actuarial assessment or public hearing process.  It was reported that flaws and inconsistencies were included on the benefit payment projection model, which was used to determine the plan’s financial ramifications.