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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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Here are some comments on lump sum buyouts and how the amounts should be determined. Few are likely to read but input from knowledgeable readers might guide those who are inclined to consider the buyout approach. Instead of a cash lump sum buyout, the underfunded pension system could issue a promissory note (or bond) to each retiree in an amount derived from the present value of the expected pension. A trading market for those obligations could be created and each retiree could decide whether to hold on to the obligation and get regular payments or to sell the obligation for… Read more »
Sports fans the amount of money in the
plans is not enough to cover withdrawals
for self management. Allowing this will
force the plans into receivership, as a news
anchor would say, “ Good night and good luck”.
In reality, this sort of buyout should’ve been done for Social Security recipients upon their retirement years ago. Many would’ve gladly taken a payment equal to what they contributed ( plus interest ) in one lump sum rather than a monthly stipend that is projected to end in 2034(?), depending on whom you believe.
Chicago should just bankrupt and let the courts figure it out. Either way the taxpayers will get the short end of the stick. Pensions have to be stopped from just eating away all services in the city. They should have a cap limit on all pensions no more than twice what the maximum Social Security amount is and do not give them till age 62 at the earliest with the same discounts SS takes. Full retirement age should be 67 just like everyone else. There are so many over $100,000 per year pensions and lots more on the way that… Read more »
So true. I don’t see a way out of this, other than leaving that nasty City and State.