-- Connecting the dots between our economy, government and business --
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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Other articales i read state the many pension, privat & public, are required by law to keep majority of there investments in bonds.. and many pension, private & public, are looking to get out of those restrictions and invest larger % in higher risk–stocks, private equity, hedge funds, private debt, etc. Are illinois pensions under any those legal restrictions to keep fixed % in bonds?
Yes, the 650 local police and fire pensions are required to keep a certain portion in bonds, depending on their size. 40% to 60% is common. The biggest state and Chicago pensions are pretty much free legally to do what they want. However, even they are forced to keep more in bonds than they would like because they are so underfunded that they need most of their investments for short term cash needs, which require the certainty of short term bonds.
Thats huge, wonder if all those 650 cop and fire pensions are pressuring jb/state to let them dump the bonds and take on giant risk—because the tax payer will bail them out when it all collapses