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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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wow-fantastic writing E Bauer!. does anybody out there in wp land know–do each union have to agree to have there discount rates changed? or cook up some actuarial report to allow it to happen?, i.e. does rahm go to each union pension behind closed doors and say hows about you agree to change your discount rate and in exchange I’ll push thru a gigantic $10B POB for ya all ,I’ll get reelected and the gravy train keeps a rollen. and who care if the tax payer & bond holder are screwed.
The answer is a bit messy and, yes, it does get politicized. Generally, the pension trustees make the decision. They base it on input from the actuaries and accountants, and often get leaned on by the pols that put them in. They do have to live within the GASB accounting standards, however, like those discussed here.
thanks, the pension trustees are not independent of the union leadership they’re mostly appointed by union leadership, correct? so backroom collusion/ cook the book deals go on
Looks like musical chairs on the Titanic. The city will be worse off after this when the fees for the offering are considered, which should be a minimum of $100 million (1%). Rahm’s buddies don’t offer discounts, maybe it would be 2%? Then they are putting $10 billion in the hands of who? Glad it’s not my money. Good luck Chicago people.