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Summary and audio linked here.
Chicago’s political leadership is floating a pension buyout program as evidence it is seriously addressing the city’s thirty-six-billion-dollar unfunded pension liability, but Mark Glennon, founder of the Illinois policy research organization Wirepoints, said that the proposal moves debt from one column to another rather than reducing it, and that the broader fiscal picture facing the city continues to deteriorate across every measurable dimension. Audio here.
Expect no retraction or apology. This what they do.
The state’s existing buyout program for its own pensions is the precedent for Chicago, which should be a warning: Look out for similar exaggerated claims and shoddy analysis.
Full interview and summary linked here.
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“The budget makes the state’s full STATUTORILY required pension contribution for fiscal 2021, which falls short of an ACTUARIAL level.” – Yvette Shields, Writer, Bond Buyer, May 26, 2020. vs. “Illinois law has put the state on a path to fund the pension liability in a manner that is ACTUARIALLY sound, and the state has been following the payment plan set out in that law.” – Don Harmon, Illinois State Senate President, April 14, 2020. https://fixedincome.fidelity.com/ftgw/fi/FINewsArticle?id=202005261548SM______BNDBUYER_00000172-5225-d4a7-abfe-feef81890002_110.1 http://www.documentcloud.org/documents/6842666-Illinois-coronavirus-request.html Obviously if the unfunded liability keeps GROWING, the plan is not actuarially sound. Actuarial payments are not necessarily sound. Actuarial Required Contribution payments… Read more »
The Edgar pension ramp is the same thing as the negative amortization loans that crashed the real estate market in 2007. Sure your credit report shows you made on time payments when in reality your balance would keep growing. What could go wrong?