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.
Why can’t they fund their own retirements?
With an average salary of $200,000 over their final 4 years worked, a 35 year career results in a starting IMRF pension of $130,000. The pension increases 3% annually in retirement. The accrual rate is 1 2/3% for first 15 years of service (25%), and 2% for remaining years of service (40% for 20 years), for a total of 65%. $200,000 x .65 = $130,000. That is Tier I benefits for those beginning their career prior to January 1, 2011. The benefits are contractual and cannot be diminished or impaired per the Illinois State Constitution, voted into law December 15,… Read more »