Scott Reeder

SPRINGFIELD -- Folks in the private sector who have watched their 401(k)s head south -- as the stock market plunges -- are in for a surprise.

They are not only on the hook for the losses they experience in the stock market but also for those felt by teachers, state employees and municipal workers, others on the public payroll.

Taxpayers will be asked to sacrifice for those who likely will have better retirement benefits than themselves. The reason: Illinois politicians have underfunded pensions to the tune of $44 billion and declining stock prices are hammering public pension funds.

What we are seeing is sort of a reverse Robin Hood -- robbing from those with battered retirement plan and giving to those with more generous ones.

Just how long is that politically sustainable?

It’s a really unfair question to ask.

I’m not faulting government workers for the pensions they have earned. They should receive the benefits they have been promised. That’s only fair.

But Illinois politicians have spent three decades squandering money that was supposed to have been set aside for the pensions of teachers and other public servants. Now they are looking for someone other than themselves to blame and the employees themselves have become convenient targets.

Expect the pension envy card to be played.

Only 18 percent of private-sector workers receive a pension that promises a certain amount of money during each year of retirement.

Most folks, have a 401(k)-type plan where they (and sometimes their employer) contribute to a fund and the employee has to figure out how to invest it.

The median 401(k) balance for those 65 and over is only $53,400, Vanguard Group reported in 2006. Assuming the retiree spends 5 percent of the nest egg each year that would leave only $2,670 in annual income.

By comparison, a retired state worker who was earning $45,000 at retirement can expect to receive $22,545 per year plus an annual cost of living adjustment, according to the Illinois Comptrollers Office.

Can anybody say pension envy?

Once upon a time, good retirement benefits were considered a way of compensating workers for accepting lower paying government jobs. That’s not so much the case anymore. USA Today recently pointed to a U.S. Bureau of Labor Statistics finding that a typical fulltime state or local government worker made $78,853 in wages and benefits in 2006 -- $25,771 more than a typical private sector worker.

Public-sector retirement benefits are not as rosy as one might think. After all, many public employees, such as teachers, are not eligible for Social Security and government employees oftentimes have paid in more toward their retirements than others.

But in a world of sound bite political campaigns, expect those facts to get lost in the mix.

The perceived retirement disparities between government workers and everyone else are ripe for political exploitation. (The only other option would be for politicians to own up to their own irresponsibility -- which will happen when pigs fly.)

Illinois taxpayers owe almost $10,000 per household in teacher and state employees’ pension payments. That shortfall will have to be made up somehow.

It’s a sad situation, but one ripe for political exploitation.