Chicago’s public pension crisis has gotten to the point where some are actually worried that the third-largest city in the United States will go the way of Detroit. The Windy City’s public pension system is one of the most poorly funded in the country and it has saddled the city with crushing debt, according to a recent New York Times report. In fact, 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,” the report notes. “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,” it adds. Illinois lawmakers, who essentially control Chicago’s pension system, have made little to no progress solving the problem because no one wants to entertain the politically unpopular notion of cutting the benefits of public sector retirees to save money. With that option taken off the table, lawmakers have been left scratching their heads over a possible solution. Granted, Detroit’s problems are much worse than Chicago’s, but the pension liabilities crisis in President Obama’s hometown threaten to upend its finances completely. “Chicago has put aside the smallest portion of its looming pension obligations,” the report continues, citing a study issued this year by the Pew Charitable Trusts.
Posted on: Tue, 06 Aug 2013 22:02:04 +0000
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