Chicago Sees Pension Crisis Drawing Near

http://www.cnbc.com/id/100941585


..."CHICAGO — Corporations are moving in, and housing prices are looking better across the region. There has been a slight uptick in population. But a crushing problem lurks beneath the signs of economic recovery in Chicago: one of the most poorly funded pension systems among the nation’s major cities. Its plight threatens to upend the finances of President Obama’s hometown, now run by his former chief of staff, Rahm Emanuel. The pension fund for retired Chicago teachers stands at risk of collapse. The city’s four funds for other retired city workers are short by $19.5 billion. At least one of the funds is in peril of running out of money in less than a decade. And starting in 2015, the city will be required by the state to make far larger contributions to the funds, which could leave it hundreds of millions of dollars in the red — as much as it would cost to pay 4,300 police officers to patrol the streets for a year.

“This is kind of the dark cloud that’s coming ever closer,” Mr. Emanuel said in a recent interview, adding that he had no intention of raising his city’s property taxes by as much as 150 percent — the price tag, he says, that it might take to pay such bills. “That’s unacceptable.”

Illinois lawmakers, who make key financing and benefit choices for Chicago’s pension system, have wrestled for months without agreement on the politically troublesome matter of cutting the benefits of public sector retirees to save money. And last month, Moody’s Investors Service downgraded Chicago’s rating by an unexpected three notches as part of a broad reassessment of how pensions are affecting the financial strength of cities. That “super downgrade,” in the parlance of the bond market, left Chicago, the nation’s third-largest city, with a lower rating than 90 percent of Moody’s public finance ratings. ..."

SHOCKER!!

Rick wrote: SHOCKER!!

I agree. Who ever would have thought there was a liberal democrat with a grip on reality.

Paper Pushers in MANY cities/counties have $150K a year with medical...........Military average $50K and they give, give, give..........this happened over 50 years of bloated political promises......was wrong all along. CUT the retirements to average military......all solved.

Before a Socialist Radical chimes in....military PAY INTO SOCIAL SECUTITY and MEDICARE......we also must pay Medicare Part B and dental Insurance....these civil servants were overpaid and given bloated retirements...........CUT to match military.....all fixed (this includes cops and firefighters----not special).

deltamrey wrote: Paper Pushers in MANY cities/counties have $150K a year with medical...........Military average $50K and they give, give, give..........this happened over 50 years of bloated political promises......was wrong all along. CUT the retirements to average military......all solved.

There is no reason that a pension paid for by the taxpayers should ever exceed the starting wage for the job or division in which the public employee worked. I'm not talking military here, but the other jobs within the public sector. We pay all of our public workers a "living wage" from day one of their employment. This 80% of final 3 years, plus medical, nonsense has to end for public workers. It is an undue burden on the taxpayers who already generously compensate those workers during their working years.

Why isn't Social Security good enough for so many public employees as it is for the majority of the rest us?

FDR was right about how it's wrong for public employees to practice collective bargaining.

Do YOU plan to retire on Social Security alone? Many employees, both private and public, union and non union get pensions, it's part of the benefit package that attracts good employees to a particular company or government job. It's a contract, just like any other.....and should not be breached. You don't see CEO's, or Congress critters agreeing to give up their pensions when times are tough for their company, or the government...they have a contract and expect to get what has been promised. But when it's an employee....especially a union employee.....THEY don't get that same consideration.

The most generous pensions that I have come across came from major corporations, not government. I have worked for both, and the private company is normally far more generous with pensions.

archer wrote: Do YOU plan to retire on Social Security alone? Many employees, both private and public, union and non union get pensions, it's part of the benefit package that attracts good employees to a particular company or government job. It's a contract, just like any other.....and should not be breached. You don't see CEO's, or Congress critters agreeing to give up their pensions when times are tough for their company, or the government...they have a contract and expect to get what has been promised. But when it's an employee....especially a union employee.....THEY don't get that same consideration.

The most generous pensions that I have come across came from major corporations, not government. I have worked for both, and the private company is normally far more generous with pensions.

Public pensions are criminal. Unlike private companies who decide their own pensions, public employees aren't bargaining with anyone. They are bargaining with themselves. There is no incentive for the "employer" to keep costs under control, since they can't go out of business. They can just tax the future. Our youth today will be crushed by these pensions which should have never been given. In order to save the future, we must make adjustments now.