-- 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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Why are people fleeing Illinois?Land of Lincoln now one of the most unpopular states in the nation
the fund probably lost a lot more as it’s investments in private markets/equity are more than likely not included in -11.7% loss
PPF says figure a 7% discount factor. But that is a big fat lie. He is full of schmitt. Risk Free bonds trade at 3% if that. Years back it was much less. All government lackie lies. The pension time bomb is going off and will destroy the Chitty of Chicago. Criminals do not pay taxes and that will be all that is left in the Chitty.
I discussed this with PPF earlier when I was stating the discount factor is overly generous. These are cross generational funds. Recessions and near depressions have to be accounted for. He disagreed. I am not sure my thoughts are original as my brother is a well known economist who has actually spoken to Illinois pols to let them know the trouble they actually are in. One can’t simply slide by 2008/2009 and last year and expect returns to consistently, at least from a perspective of prudence, reach 7%. Remember what is at stake with a near 12 percent loss. It… Read more »
I laid out my post but it was snagged in the spam filter. You claim the expected rate of return should be lower but you never responded to the point that the 40 year average rate of return for the teacher retirement system is over 9 percent. You can cherry pick bad years but the long term doesn’t side with your theory.
Enjoy your day PPF, storm clouds are here.. The Chicago Minicipal fund is DONE, just a matter of letting her expire. The ramifications will be State and even Nationwide. According to its most recent actuarial valuation, the pension fund had a funding ratio of 23.4% as of Dec. 31, 2021. In its report, actuary Segal Group said the pension fund remains at risk of having to liquidate investments in order to pay benefits, and “future unfavorable investment performance could lead to the fund not meeting its financial objectives.” Translation – Bankrupt. Btw, 40% funding is considered junk rated and likely… Read more »
They can find out when they receive their next bill. Storm clouds indeed.
Raise taxes on union thugs and take a chainsaw to their pensions
So your plan is to just tax union members? You guys are really running out of ideas. I got a great idea. “Let’s take a live tuna and feed em mayonnaise”.
Keep spinning your wheels with unconstitutional ideas. In the meantime, taxes will be increasing.
You could probably only tax union members pensions if all pensions, public and private were taxed. Good luck trying to get that passed.
Maybe they will just tax 401k/IRA withdrawals. Alabama and Hawaii don’t tax pensions but they do tax retirement savings withdrawals. Stewie better be careful what he asks for.
Their is no incentive to maximize investment returns nor to divert funds from current preferred spending to pension funding. As PPF always says, plenty of more taxes to be had, and they intend to get them. Why give up their current woke bonanza?
Nothing to see here folks. According to PPF, any shortfall or imparement will be offset by tax increases.
PFF is right as the law currently stand, but he’s wrong that the law won’t change.
That’s just how it will happen until the eventual confiscation of all real estate in Illinois. Meanwhile the legislator’s are considering a tax credit for children. See, there is no desire to do anything except tax and spend from the politicians elected by the Illinois public.
Economic policies of the biden disaster are showing results. Way to go Slow Joe
Chicago makes investment decisions based on woke horsesh*t and not sound investment principles– so this financial loss was intentional