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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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“According to Matt Williams, who does pensions for the Alton Fire Department, the unfunded liability works similarly to a mortgage.” The same tired point repeated endlessly by unions and public sector pension supporters without putting too much thought into what that means to the taxpayer. Whenever these newspaper articles come out, the taxpayer is rarely reminded of the following fact. The taxpayer has many so called “mortgages” at the city, county, state, and Federal level. Just one more reason the mortgage analogy doesn’t work. Sort of like talking about the bedroom dresser charge on your credit card, and not talking… Read more »
What exactly does it mean to ‘do pensions’? Several folks in my village have worked on the police and fire pensions for many years but have demonstrated little understanding of the details behind funding calculations and actuarial assumptions.
It is clear to me that there are too may plans in Illinois and too few pension trustees or municipal staffers with sufficient expertise to govern the plans adequately. Consolidation of the 600-some plans is a must.
The quote from the pension official comparing it to a mortgage is especially foolish. It should be compared to a negative amo mortgage.