-- Connecting the dots between our economy, government and business --
Summary and audio linked here.
If this bill passes, say goodbye to local control over all Illinois parks and expect to see open drug and alcohol use, needles, no sanitation and fire hazards, but no ordinary park users.
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.
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Audio and summary
Offering a lump sum option to Tier One pensioners would quickly result in the plan bucket being empty. Watch solidarity crumble as people rush to the exits. I bet the system could offer lump sums at a 25% discount from the present value of the pension annuity, and people would still rush to the exits. In fact, the system should put out an offer such as “how low will you go” and cash out those who are willing to take the biggest haircut. That’s the way to reel in that can down the road.
And actuaries I’ve talked to ridicule the idea because the first takers would be people with health issues. When they cash out and you take them out of the risk pool, that destroys the actuarial basis for the remaining pool
When Tier 2 has neutered pensions in Illinois below the benefit level of Social Security….and it has… the call for new DB plans is piling on a dead horse. Ive been saying this, here on wirepoints, for years. Unless ya honestly want to help public labor obtain portability over their retirement, at a higher cost to taxpayers. DB plans will only add costs and not save. This portability feature was oft cited for a reason to switch to DB plans…still is… but now, FINALLY, when its realized this DB portability would only help public labor, and would hurt the States… Read more »
Mark: That’s a remarkable way to state the disaster, “DB pensions for govt ees are opaque, easily corrupted and incompatible with an informed democracy”.
Brilliant….. I’ll remember that !
Cheers “PF” brother !
Taxpayers should expect much more from our elected officials. Sadly we end up with very little to solve the really big problems.