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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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What needs to be also included is how much money was taken out by retirees vs contributions. They lost -9.5% which when added to outflows to pensioners the funding ratio is now lower. This is what I call “Defunding” More money taken out and lower returns defunds the entire fund. So if not one dime is put into fund how long would the fund last and all those not retired yet would get nothing but those who are retired benefit. In my opinion whatever amount is in any fund payouts should be readjusted yearly with a guaranteed maximum of what… Read more »
It doesn’t matter if the fund is completely empty. You are making the mistake in believing that the level of funding in these pension funds has anything to do with the level of benefits that pensioners receive. If the fund runs low the courts will require additional funding to be added. If the pension fund runs to zero the courts will mandate that pensioners receive their required monthly pension check. This has been discussed in prior court decisions.
Totally agree but these contracts were made between unions and pols. I do not see how this could be legal when ALL parties must be present for a contract to be honored. The taxpayers were not represented in the negotiations but are liable for the outcome of two parties and us being the third. A good friend on mine is a retired union carpenter. In his retirement contract there are many stipulations on what he can and cannot do. He can get a job working as a carpenter but it has to be union. If it ends up more than… Read more »