‘Ghost Pension’ Recipients Haunt Illinois Taxpayers

Published October 31, 2016

An Illinois lawyer’s blog post says government employees receiving pay through taxpayer-funded pension plans at rates exceeding personal contributions towards benefits are draining the state’s pension programs.

In September, a blog post by Chicago lawyer Eugene Keefe was featured by local reporters from the Sangamon Sun and other media websites. Keefe’s post explained how “ghost pension payrollers” (GPPs) and “ghost pensioners” are affecting the state’s pension problems.

Bill Bergman, the director of research at Truth in Accounting, a nonprofit organization dedicated to promoting transparent government financial reporting, says government “ghosts” have a history of spooking taxpayers.

“Some people who receive these benefits might be a little bit concerned that they’re being called ‘ghost payrollers,’ given the illegal history of ‘ghost workers,'” Bergman said. “On the other hand, it also possible that taxpayers and citizens should be concerned because the types of incentives that led to those illegal arrangements that were subsequently prosecuted have floated into what is apparently a legal practice.” 

‘An Outdated System’
Ted Dabrowski, vice president of policy at Illinois Policy Institute, says Illinois’ government pension system is broken.

“Illinois is hanging on to an outdated system, which has not worked, eating up 25 percent of Illinois’ budget, eating up so much of the tax dollars that should instead be going to schools or necessary programs,” Dabrowski said.

Increasing Costs, Declining Funds
Dabrowski says the soaring costs of government pension entitlements is consuming funding for necessary government functions.

“I think it’s fundamentally wrong that pensions for government workers are taking preference over everything else that the state funds,” Dabrowski said. “It’s taking away funds from education, from people who are dependent on the government for core governmental services. These pensions are not affordable, no matter how much you fund them.”

Dabrowski says the state government should give workers more choice in managing their pensions’ futures.

“The biggest reform that can happen is to take the lead of the private sector, by offering self-managed plans like 401(k)s,” Dabrowski said. Existing employees should have the option to be in a self-managed plan. It’s not fair that they should be forced to be in a plan that’s heading toward bankruptcy.”