Aldermen Briefed on Pension Time-Bomb
September 27, 2012 § Leave a comment
[Chicago’s] Chief Financial Officer Lois Scott reminded council members that absent significant changes to pension plans, the city will be forced to drastically cut services, raise taxes or do both to close a funding gap that could reach $700 million in just a few years, aldermen said. …
… Lawmakers are looking to fix the state’s woefully underfunded pension system, but the city also needs changes from Springfield to repair its retirement funds.
… Absent a city pension overhaul, the fund for retired city firefighters would become insolvent in nine years, according to a city report issued two years ago. The police pension would go broke four years later. Funds for city laborers and municipal workers would be broke by 2030via Chicago Tribune.
These numbers are all wrong. These pension claim they’re going to earn 8% on their money year after year. That simply has not happened in a decade and they are tens-of-millions of dollars behind where they claimed they would be be even two years ago.
Kudos to my friend Anthony Curran who suggested we start a Pension Death Watch. I think it’s a great idea.