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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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Two things come to mind: drop and bucket. It’s a big bucket and that drop ain’t going to do a whole lot to solve the problem.
The longest journey begins with a single step. Then there are those too meek to realize that …and thier stuck in thier small little worlds…affraid to take a single step towards a long journey. Several small steps can accumulate. Tier 2 reform, Cullerton model, incentivising buy outs, collective bargaining strategies….to name a few….others will emerge. The arguement that a step in the right direction was too small a step, is beyond foolish. We all know a single step can be followed by another step and yet another step. Continuing progress is whats needed. Or we whine, its too far, its… Read more »
Advocate, you are right that we should be pursuing all steps large and small in the right direction, but just for a little perspective, it would take 4,000 settlements this size to fix the unfunded liability.
And are you really defending the Tier 2 reforms? They are a time bomb and horribly unfair for new workers. See the article linked below: http://educationpost.org/heres-why-illinois-teacher-pension-system-is-a-bad-idea/
We have gone round and round on this. Yes I will defend tier 2 with the single caveat it will need slight amending to increase the benifit level to pass fed. safe harbor regs. Not hard. I wont deny it is a step in the direction of reducing pension obligations. That is good for us right? Reducing pension obligations is what tier 2 accomlishes. It surely does. Will you deny this? The arguement in your link says it creates two classes (tiers) of workers one with better benfits than the other. DUH. Reducing gov. workers pension benifits in a constitutional… Read more »
Tier 2s must work 26 years just to break even on what they put in! 3/4 of them will leave with negative net benefits! They pay in not just enough to pay their own way but an additional subsidy to fund the deficit, which is due entirely to Tier 1. That’s not just a different class of lower benefits, it’s obscene. It discourages good people from joining and it will crash the whole system as soon as they can outvote the union leadership running things who are Tier 1.
Interesting points indeed Mark….let me disect them. I will go sentence by sentence: Reply to sentence one: 1. A safe harbor tweek will put public employees on par with Social Security benifits. Now yes, they are slightly below SS with tier 2, still, the tweak will fix it. If they leave government before they vest that helps the state fiscaly and hurts the worker. An acceptable situation considering ourfiscal hole. Sentence 2 etc: 2. They know the rules when they take the job. They can take the job or leave it. Sounds fair with freedom of choice. 3 If the… Read more »
I’ll let you have that last word. Good luck defending Tier 2.