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The amount the city owes to its four pensions that pay benefits to retired firefighters, police officers, municipal workers and laborers increased “due to the short-term impact of the global market volatility on recognized investment income,” the report said. Mayor Brandon Johnson, who took office in May, has set up a pension working group that is charged with finding sustainable solutions to the long-term challenge.
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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Time for Brandon to get together with Moody to figure out a way to further screw over the taxpayers, who are just collateral at this point. Moody and the city leaders have a long history of screwing the taxpayers into serfdom, two birds of a feather they are. Financial “instruments” are not real wealth, wealth is gold, industrial capacity, natural resources, an educated workforce, etc. But Moody will continue to make “instruments” to sell to traders at the taxpayers expense, creating a sick illusion of wealth.
How about the money that was so graciously promised to the immigrants for various services be instead diverted to the pensions?
Oh boy, Brandon set up a pension working group! What novel thinking! We can all rest easy as this new working group will no doubt fix the problem lickety split. Then they can turn their focus on crime, and I’m sure they’ll identify the root cause Brandon likes to talk about. This dude is a complete farce.
4 years ago in CO we had a state pension debt of $30B. The Guv at the time, a Democrat, brokered a deal with public sector unions to lower the pension debt to zero in approx. 5 years. Deal consisted of the following changes; Taxpayers would kick in an extra $350MM per year, Unions would also kick in some extra $$, I forget how much, Retirement ages would be increased(teachers was increased from 58yo to 62yo and you should have heard the belly aching) I know this would never happen in Taxistan because da public sector unions are the corrupt… Read more »
There is no brokering of any deal with Il-CHI public unions cause they control our politicians, plus those unions know we cannot take a strike by a major public union. CO public unions are like kindergartners compared to the public unions here, plus our politicians are among the most corrupt in the country. So of course they will act in their interests rather than ours. Lastly, avarice scale here is of a different plane, unfunded pension medical estimated by some in IL -CHI at around $0.5T.
Typo… not decades of underfunding …
sb decades of a corrupt bargain between politicians and public unions, resulting in decades of excessive public sector pensions-medical
Agree, the Chi/Ill dems only hope is a federal bailout, so setting the proper narrative in press is important—- i.e. the massive pension debt is solely due to under-funding and not the crazy contracts themselves. Then the idea is to pray dems sweep nationally in ’24’ and come up with some fairy-tail rational that a Chicago pensions deserve a bailout by taxpayers in a zero debt Wisconsin or elsewhere, similar to what Congress passed for private sec pension ‘Multi-State’ bailout, which got dem & rep support. It’s no different than the fairy-tail that “community dis-investment” in black community is due… Read more »
National bailout not required. Those public sector pensions-medical benefits are secured by your homes, via lock solid provisions in the Il constitution, in the form of unlimited property taxes. The politicians have even prevented municipalities from filing for bankruptcy cause of those pension-medical benefits. So if they have to double or triple your property taxes, and your home value goes down by like 50%, so be it.. Decline in home prices, especially in the suburbs with less voting density is fine cause the lower sell price will promote “equity”. Only limit to property tax increases are if the state becomes… Read more »
As usual U are uninformed so u make Asinine statements about medical insurance city retirees get no medical insurance from the city of chicago at all
“the massive pension debt is solely due to under-funding and not the crazy contracts themselves.” That’s because it is solely due to underfunding. The costs of the pension contracts are well known and the state and cities knowingly underfunded them. The General Assembly had available to it all the information it needed to estimate the long-term costs of those provisions, including the costs of annual annuity increases, and the provisions have operated as designed. The General Assembly understood that the provisions would be subject to the pension protection clause. In addition, the law was clear that the promised benefits would… Read more »
Highest taxes already and still this is not enough to fund the pensions at levels needed. Some of the most generous pensions in the world. Unions gamed the system; now high-income earners are fleeing the state for Texas and Florida (by the hundreds of thousands). Let’s see them fund the pensions with the new immigrants.
Taxes aren’t high enough if they want to continue with all their feel good spending initiatives. Plenty of money for pensions as well as plenty more areas to raise taxes.
Perhaps, as I posted above, the money that has been promised to the immigrants could instead be devoted to the pension funding. After all, the pensioners were promised first
I don’t think any new spending initiatives should be allowed until full actuarial payments are made. The money going to immigrant healthcare certainly falls under that concept.
Excellent point!
Then as a retire or city/ state/ municipal public sector employee are you opposed to the pending bills changing Chicago Cop & Fire pensions beyond “safe harbor” requirements “until full actuarial payments are made” as these changes will result in “new spending initiatives”?
Or programs such as immigrant health care could be cut
What are your thoughts on fed bailouts of state & municiple pensions? Is this letting the ‘thieves’ (me) off the hook? Same question for recent passed private sec Multi State pension bailout? I guess the ‘thieves’ are the employers getting off the hook
But what about….and what about….but but but Pensions were not funded properly. Just because you find them too generous has no bearing on the cause of the underfunding. The state knew what they promised and as such knew the costs. When you try to steal from someone you are a thief. You’re siding with thieves when you advocate stealing from pensioners. Bailouts are merely local or state government (or corporations) admitting to the federal government that they were irresponsible with their money. It doesn’t let thieves “off the hook”, it allows local government to make horrible financial decisions and get… Read more »
Pretty good answer. Seems like your not in favor of fed pension bailouts when you write-“Bailouts are merely local or state government (or corporations) admitting to the federal government that they were irresponsible with their money.? Or, maybe your just saying it irresponsible? So, from your perspective that leaves cutting spending or raising taxes to fund pensions (I get it). But with dem machine, who all the public sec unions where 100% behind, in total control of gerrymandered state and with passage of an Amendment, etc, does anyone believe there will be one dime of spending cuts? So, that leaves… Read more »
During most of the period when pensions could have been more fully funded, public employee unions owned the legislators [state and local], the governor/mayors and the courts. Suits to compel more funding could have been initiated and pressed. Instead, unions traded raises at the time in place of more pension funding. Politicians (including judges) were sufficiently venal and ignorant to do the unions’ bidding in exchange for their members’ votes. Those politicians’ heirs are currently undermining the middle class by appeasing Hollywood and Silicon Valley. The unions [and teachers who were at least as bright as Rev. Fred Klonsky] were… Read more »
The unions were not concerned about pension funding because they believed, as PPF always tells us, they already had an iron-clad guarantee on that money. It’s in the Constitution! They were therefore free to go after more of the public trough every year, confident that when the pension system needed more money, they could just demand more. Best of all, they can say that the taxpayers are the deadbeats and thieves in the situation. It was (and is) the perfect extortion scheme. And oh by the way, the pathetic test scores are your fault too.
If they weren’t concerned why did they sue to demand increased funding 3 different times? Using your logic, this would mean less money available for raises and other benefits. Yet they did it anyway. Going through life with such ignorance is no way to live Prozac. The ignorant voters are the cause of this underfunding as they didn’t demand full actuarial payments, not the people that had no choice but to join the pension program when becoming an employee. They exchanged their labor for this deferred compensation and your attempts to steal from them will not work. Taxpayers will either… Read more »
You’re right to have stated that the public employees literally had no right for opting-out of these varous pension plans meant for their retirement years. If they chose such employment it meant even from their first day there they were mandatorially enrolled in such plans whether that was their wish or not. I think that’s a point worth emphasizing over and over again in such exchanges where its implied otherwise.
Unions had a clear incentive to divert potential pension funding payments to their own pockets each year. They always knew they could get more. And that’s exactly what they did. Get bigger salaries today, even though that money should have been used to fund pensions. The added benefit was that by diverting money from pensions into higher salaries, the pension itself only grew larger. I understand that individual teachers had no choice but to participate in this system. But I am getting tired of being called a thief as a taxpayer, when clearly the teachers are the ones who benefitted… Read more »
Yet public employees sued 3 times to demand that pensions were funded. Why would they do that if it’s to their benefit for them to be underfunded? You refuse to answer this question because it doesn’t align with you opinion. You are purposely being ignorant. I mean I could see having your false opinion if you were unaware of these past lawsuits but even after you are provided that information you double down on your ignorance. Teachers would have had raises even if pensions were fully funded. Nothing stops them from negotiating their best possible contract. You are speculating that… Read more »
Surprise! IL Supreme Court rules 3 times that public employee unions can get more money now, and more money later. Guess they were just helping unions to see that it was only to their benefit to not require specific funding. More money on both sides of retirement that way. Those Supreme Court justices really put a hurt on the public unions by ruling against them. Why did the unions file the lawsuits? Maybe they could see that sooner or later the whole thing would get out of hand, and there would be efforts to rein it in. Not to worry,… Read more »
It was all one big plan between the courts and unions. Lol
You do truly embrace next level ignorance. Anything to justify your desire to steal from retirees.
I didn’t say it was a plan. I just said that the fact that unions filed lawsuits doesn’t mean anything as they had no effect on the situation.
Respectfully do you have a breakdown of these so called ignorant voters? The people who voted these clowns in are mostly also recipients. Do you have any articles from politicians trying to get elected or re-elected saying they will make sure the pensions are properly funded? I would not call the voters ignorant but more like uninformed. We get redacted info not the whole story. No one knows what’s in a politicians mind as to what they will do when in office not what they just promise to get elected. I do not ever recall anything on a ballot stating… Read more »
It seems you have answered your very own question. If they don’t know or don’t care, you want have politicians that run on these issues. The only way to make them care is to actuarial fund these pensions. When there isn’t enough money for all the other give aways, voters may finally take notice and demand something different.
That’s exactly what some people are trying to do. They just haven’t been successful. The constitution prevents these thieves from stealing from retirees.
I don’t understand how stealing can be done. As you say it is in the Constitution. Unless the constitution is changed which is highly unlikely via a con con changes could then be made maybe but most likely enhancements would be made. You are protected more than most people in the private sector. There is also the possibility of some sort of Federal bailout if the Dems win in 2024 or if JB runs for president or at least VP money will come from D.C.. I still would like to see all aspects of those who handle the money to… Read more »
“During most of the period when pensions could have been more fully funded, public employee unions owned the legislators [state and local], the governor/mayors and the courts. Suits to compel more funding could have been initiated and pressed. Instead” So you started your response off with a complete lie or are you just ignorant to this issue. Which is it? Public employee groups tried to force Illinois leaders to properly fund pensions. The courts on 3 different occasions told them no. In 1975, the ILSC told them the drafters of the constitution did “not establish the intent to constitutionally require… Read more »
Name-calling aside, you have not provided evidence that the unions were really concerned about funding. No doubt union lawyers who were paid from penson assets would encourage litigation about anything that would generate a fee. The fact that negotiators made demands at the bargaining table and settled for more pay rather than more funding tells the story. Funding cases by public employee unions in many states were all the rage for a while, as were 13th checks and supplemental funds that would have a guaranteed return notwithstanding investment performance. Pension lawyers talk across state borders like tobacco and petroleum and… Read more »
Jerry, You literally stayed that “Suits to compel more funding could have been initiated and pressed”. I point out how you are completely wrong and that public employees did file lawsuits and you double down on your face less assertion. Also, union negotiators don’t get to negotiate funding level for pension funds. They have no such rights under Illinois law. Pensions aren’t determined at the local level but through the pension code. You have provided absolutely no evidence that they weren’t concerned about funding. I, on the other hand, have provided evidence that they wanted pension funds properly funded. They… Read more »
I think you meant “baseless.” Unions in Detroit juggled actuarial assumptions to “induce” the city to provide wage increases that the unions could not win through arbitration. Repeated harassing litigation was filed with the object of gaining 13th checks. The same lawyers fought (with pension funds) city attempts to restrain use of pension funds to bankroll February seminars in Hawaii to instruct pension trustees about their fiduciary responsibility while the “students” were on the golf courses or in the pools. Detroit pension attorneys “monitored” nationwide class actions being handled by competent class counsel, sending lawyers to NYC to “monitor depositions”… Read more »
Here’s an article from Illinois policy on pension funding. Further down is an example of is it underfunding or over promising.
https://www.illinoispolicy.org/illinois-pensions-101-paltry-contributions-yield-million-dollar-payouts/
The pension debt is the result of corrupt criminal collusion between public sector union and politicians. Period. Anything else is just deflection. The taxpayers don’t owe the criminal colluders a cent of their criminally ill gotten gains.
Public unions exercise their right to collectively bargain for the best possible contract. The public is well aware of these costs but they don’t demand that enough money is set aside to pay for what they already agreed to pay. Voters that don’t advocate for full actuarial payments are the reason. Anything else is just pure lies.
The taxpayers owe the pensioners their payment as it is a legal contract. Pretending it’s criminal collusion is nothing more than playing pretend. Pensioners will be paid and taxpayers are on the hook. Your delusion doesn’t changed the actual facts.
Let’s get practical. Chicago is the epicenter of all of this. They are far more limited than the State in imposing taxes and collecting revenue. This is why a focus on Chicago pensions is necessary. Many of the tax increases will be regressive. I don’t know why this doesn’t bother the left more than it does. I don’t know where it gets anyone to label the situation as overspending or a revenue failure. The gap is real, it exists, and the non-adults who are elected over the past decades were, or should have been aware, of the problems they were… Read more »
I agree that it does no good to focus on “overspending or a revenue failure”. I only discuss it to counter the narrative that it’s ok to steal from pensioners because pensions are too generous. It just doesn’t matter as it’s a debt with all the legal ramifications attached. It’s no different than student loans. While I may agree that college costs are out of control, none of that matters as to the legal obligation of those that borrowed. The debt must be paid regardless of all the extra noise. I also agree with you that Chicago doesn’t have as… Read more »
I could be wrong, but bankruptcy won’t solve Chicago’s problems. They owe a lot to creditors, and some of them have liens on sources of income, such as sales tax receipts from the state. Since the politicians will continue borrow to the hilt, and on terrible terms given the City’s credit rating, I can foresee the prospect of a relatively asset less bankruptcy, meaning little positive impact could be obtained. One view is that the City could easily become a depressing and violent dystopian place without a middle class. This is why what really is on the minds of the… Read more »
They never mention what caused the “underfunding”. That would be diverting the funds to increased spending for the Dems favored groups and causes. Atop that list? Public sector unions. They try to make it sound like taxpayers benefitted from the “underfunding”. What a joke!
Brandon needs to repeat his grade school mathematics courses to find the fix. Simple math says either increase taxes or cut other spending; sad but true.
The firefighters pension in Chicago now stands at 18 percent funded? If this one fund goes on pay as you go status, query what happens to the budget? Likely a significant disaster. Property tax increases won’t do it. Frightening.
Chicago needs a running Debt Clock in different parts of the city.
Bless his pointed little head!
Hey Brandon, how are we systemically racist guilty community disinvester taxpayers supposed to pay for all the reperations when we are so far behind paying for your gaurenteeted TIER I $multi-million$ pension for being a CPS/CTU teacher for 4 years? We don’t want you to suffer!! Oh, sorry forgot, your a fiduciary, so you’ll equitably figure it out w some CTU math…no worries