A number of people have called for government to repudiate these pensions. They advocate that local government declare bankruptcy and refuse to pay the pensions, similar to what private companies do during bankruptcy proceedings and what some countries have done.
And of course some people advocate that the United States do this to Social Security pensioners. Naturally those on social security or other government pensions are not wild about this idea. And failing to honor a contract is not something a government should do lightly and only under extreme duress. The US and the States are not at this level of economic duress.
The State of Illinois recently passed legislation to reduce their future liability. They made their pension systems for new hires substantially less lucrative then for current employees. But they have not changed the agreements entered into with public employees many years before.
People are living much longer then before. We must require our employees to work more years to pay for the increased number of years that they will collect the pension. Illinois just changed their system so that employees must work to 67 years of age to collect the full pension, instead of 60 years. If they wish to retire earlier there is a much larger reduction in benefit then before.
Most people paid into Social Security for 45 years or more. Their employers also paid a contribution. They were promised all during this time that they would receive a defined pension. For government to refuse to pay this pension would be unfair. And that is also the case for other government pensions. Employers have often worked for a government for 30 or 40 years, paying into a pension system that promised to pay them a pension when they retire. It would be unfair to refuse to pay that pension.
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