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So here ends the take of the approval of the Tier 2 pension system, with no actuarial review, no opportunity for anyone but the backroom negotiators to assess the changes before the vote was taken, and the need to take on faith the claim of $100 billion in savings. Is there anything in here that is a surprise? No. Is this sort of legislating unique to Illinois? Also no. But I think there’s still some value in observing our legislators in action.
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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Wirepoints always, and I mean always, finds the best pictures. Where do you think Madigan put that finger?
Thanks, but that picture actually came with the Forbes article.
Would Tier 2 pass today? Doubtful. I’m still amazed at how vastly different Tier 2 is from Tier 1. Most states with two or more pension tiers didn’t make as large a change to multiple pension components as our Tier 2 did. Of course, the state’s pension clause is partly to blame for the severity of that change. No takebacks, so you takeaway a lot to start. I still subscribe to the belief that Tier 2 benefits will be greatly enhanced in the near future. The pension actuaries should be providing what-if analyses of multiple enhancement scenarios. Otherwise, every savings… Read more »