-- Connecting the dots between our economy, government and business --
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.
SIGN UP HERE FOR OUR FREE WIREPOINTS DAILY NEWSLETTER
Yes, and not one word in the article acknowledging that Wisconsin pays into Social Security while Illnois, for the vast majority of its employees, does not. Add in the 6.2% of wages that Wisconsin pays into SS and that state ends up contributing nearly 14% of salary to its fully funded plan – more than the normal cost in Illinois, i.e. the amount the state would have to pay if the pensions had not been underfunded in the past. Apples vs. apples please.
You forgot to subtract the 6.2% employER portion of social security from the gross wages employees are paid. That contribution is used to calculate your salary. Also, using Wisconsin’s service multipliers, one would have to work 42-46 years to reach 75% pension vesting, not 34 as they do here.
Andrew – How about these apples: Would teachers/university/state workers be willing to take that pay cut I mentioned, contribute to social security themselves, AND work an extra 8-12 years to reach full vesting? Guessing no.