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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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Salary hikes while the pension plan is underfunded is the norm in Illinois. It takes a bit of time and a little effort to better understanding what his happening. Most City of Chicago AFSCME members contribute to the MEABF pension fund, which is severely underfunded. Per the MEABF actuarial valuation as of 12/31/2017, MEABF is: 28% funded using a market value calculation. 27.4% funded using an actuarial value calculation. The funded status will continue to deteriorate. That’s because that although the fixed employer contributions to MEABF were increased by the General Assembly for payment years 2018 – 2022, they are… Read more »
Thank you. This is excellent. What is the political class thinking? Assuming they make the required $344M contribution, and that appears to be dubious, are the politicians thinking they will raise property taxes to collect the additional $705M? Or do they simply not care, hoping for a federal bailout to come their way at some point? Or do they think they can borrow even more money?
Rahmbo should have fought to disband the union and freeze pay for the 51,000 total city ees (not cntg school system) until the unfunded pension goes down to zero.