-- 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.
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Hard to believe this was almost 5 years ago now. My, how the years fly.
Public retirees in most cases have better healthcare available to them compliments of the Illinois taxpayer. For example when teachers many decades ago opted out of Medicare and S.S. they opted into local taxpayer funded retirement and healthcare programs unbeknownst to those that actually have to pay for it (neighbors and friends) How many are on the ACA exchange like many of us are on? I wager not many.
It seems to me that we can’t blame longer life or increased health care costs on pensioners, unions, taxpayers or politicians. There is an obvious dilemma based on employees’ expectations that are no longer financially sustainable. Winds blow, sea levels rise, water tables fall. We are compelled by the world’s realities to deal with it. It’s a pension tsunami. In a real tsunami, ocean front residents get disrupted. They may or may not have flood insurance. They get some disaster benefits on their tax returns. FEMA may provide food and tents. But these victims’ lives will be disrupted and nobody… Read more »
S. Dogood, the problem is there are no standards on which benifits are granted or cost calculated. Only partially adhiered to volontary gasb standards and out dated mortality rates. Whats needed is a national erisa or pepta for public sec benifits. How can you have a dicussion on comprpmise when there are no ground rules?
As far as “standards” I think one could adapt the standards used by the PBGC for valuing accrued benefits. Pensions are generally expressed as $ per month if paid at a given age, so whatever monthly $ benefit has been promised, it could be converted to a lump sum value at, say, 65 and then discounted for early commencement. Consistent discount rates would be used for all pension systems. Other actuarial assumptions should also be uniform for the purpose of fairness even though there may be some arguments that the actuarial assumptions had been “collectively bargained” or were “contract rights.”… Read more »