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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 taxpayers are the low-hanging fruit, unless they leave Illinois
Taxpayers are not low-hanging fruit, they’re root vegetables.
“You’re trapped like carrots.” – Russ Cargill, from The Simpsons Movie
Whenever I read articles like this it becomes glaringly obvious that most older pension actuaries work or worked for companies that still have traditional defined benefit plans and that actuaries on whole earn at least double the average household income.
The above is why I encouraged my offspring to go into the actuarial profession, on the whole they are insulated from relativity. It shows in the writing of this article. An excellent article if you can stomach the entitlement mentality tone.
You may be right because there would be a major savings in actuarial fees and the profession is well-enough rewarded that they could fully fund the plan on an ongoing basis. However actuaries are like other professionals in that they have a lively interest in today’s pay as well as tomorrows. Today’s pay counts on revenues from those who have DB plans. That means governments. SO the main point is to “Say Yes” to governments as much as possible. Go along with high earnings assumptions and cover your butt in the engagement letter. Encourage appointment of union stooges as plan… Read more »
Exactly, I was talking to my kids about it and they view it as pension actuaries are acting in vested self interest. Interesting (to us) is they arrived at their conclusion as relative insiders in the industry and I arrived at it as an outsider. It really is sad and the profession should reign it in and up the standard of professional conduct and duty. In part this is why the major organizations did not merge, the difference in standards between the SOA and CAS. I value my accreditation (non-actuarial) and I would not want my credentials tainted by association… Read more »