Governor is playing games with pension fund

      Editor: Dave Uphoff

It appears that everything the governor does is geared towards what looks good on his resume rather than what is good for the state. Everyone knows he is looking eastward to Washington for his next leap. Not increasing the income tax or the sales tax may look good for Blagojevich's record, but it also means there is no help to the state's inadequate funding of education. The actions of the governor now will probably result in worse fiscal problems long after the governor is gone to greener pastures.

So, while the governor is polishing up his resume, he is destroying business in Illinois with excessive hikes in fees on almost everything. With his slick demeanor and coiffed hair, he seems to be an excellent candidate for the presidency. When is the last time you saw a bald-headed president? Eisenhower - that's when - and he was elected because he was a war hero.

By skipping payments on the state's pension fund for the next two years, many pundits say that the state's pension fund will be in great peril. In fact, pension funds along with health insurance benefits will probably eventually dwindle to a very small version of what they are today. Companies like Caterpillar are reducing benefit payments for their employees and requiring them to pay a greater portion of the deductible.

Pension funds were started as a way to attract employees to a company. Initially, pensions were made available to the higher compensated employees but eventually drifted down to cover lower paid employees. The stock market bubble of the 90's made it possible for companies to maintain pension funds because of the enormous return on investments. After the market crash, it became much more difficult to fund pensions since investment returns became much lower.

Health insurance was another perk granted by companies to attract employees after World War II when health insurance was not very costly. Now that the medical costs are spinning wildly out of control, companies can no longer afford to pay for the employees health coverage.

Now we have a debate on social security. Should it remain as it is or should each person have control over their investments in social security? I don't know how I feel about changing social security now but I do feel that if I had invested the money that I paid in to social security for the past 40 years, I would have a much larger nest egg now. The way social security is set up now is that those who earn more are subsidizing those who earn very little. There is no 1:1 correlation between what you paid in and what your receive back. In addition, those who don't live very long lose out while those who live longer than average make out better.

I know families where both parents died before reaching social security age and their children received nothing. If there was a specified vested amount accumulated in a personal account, the money could have gone to the children. I guess it comes down to your political beliefs. If you lean to the conservative side, social security should be set aside in personal accounts and that money is an asset that can be transferred to the heirs. If you lean towards liberalism, social security payments will continue to be lumped into one big pool and payments will not be comensurate with what your earnings were which means that lower income people's payments will be subsidized by higher wage earners.

It seems to me that perks provided by companies and by the government have reached their peak and programs like social security, pension plans, and health insurance will be supported less by these institutions and more by the wage earner. The average worker will have to accept these changes because if we don't, more jobs will be exported. However, on the positive side, being more self-reliant and responsible for our own welfare has its own benefits. For one, we can regain our competitive advantage in the world marketplace. Many companies are buried with health care cost commitments that were unanticipated years ago. In addition, if all workers have to pay for their own health insurance, like I have for the last 30 years, that means that I am not subsidizing someone else's health insurance or their pension plan when I buy a product made by the company that employs that person. In other words, companies won't have to pass on their health care or pension cost to the consumer. Finally, self-supported pensions will not be negatively affected by actions of the employer. Ask any United Airline employee how they feel about their pension plan after their benefits were substantially reduced.

For America to remain competitive in the world marketplace, pension plans and health insurance must become more the responsibility of the individual. Companies may continue to contribute to the employee's pension but that pension should be under the control of the employee. That is the best way for a person to plan for retirement. I am sure that anyone under the Illinois State Pension plan wished they had more control over their pension rather than letting the politicians use it for their own political gain.

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