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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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Whatever the legal requirements for funding pension obligations, it appears that few (if any) Illinois plans are well-funded. Rather than twist ourselves into pretzels trying to modify current plans, why not try the following: the entity that sponsors the plan agrees to assure that each employee as he/she retires will receive a supplemental benefit as needed to make the pension payments equal to the required safe harbor benefit. This would of course kick-the-can into the future but there is no reason the supplemental benefit could not be funded as permitted by circumstances, with a proviso that the funds could only… Read more »