Chicago Pension Data – 2017

At least FoxBusiness covers it:
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.

There was also some print coverage of the gimmick.

Two years ago we did a study of the Chicago plans based on data from actuarial reports. Updating we find benefits and liabilities increasing, funded ratios declining, while deposits and asset values remaining constant and therein lies the reason for this Pension Obligation Bond (POB).

With negative cash flow of $1.3 billion it has been outsized investment returns that have kept the plans from total collapse. The question is whether those investment gains were bought at the price of illiquidity that now requires an influx of very liquid bond money to keep making those $3.5 billion (and rising) payouts?

Another question is that, from the charts below, it looks like the Teachers plan and possibly the Laborers’ with their 49% funded ratios may not get any POB money as the headline underfunded amount being thrown out there is $28 billion which is the total for those other three plans with funded ratios in the 25% neighborhood.

Pulling together the data into a spreadsheet shows:

6 responses to this post.

  1. Posted by Tough Love on August 27, 2018 at 12:25 pm

    Off Topic ………..

    Very interesting article :

    http://knowledge.wharton.upenn.edu/article/the-time-bomb-inside-public-pension-plans/

    Worthwhile reading the comments too.

    Reply

    • Posted by PS Drone on August 27, 2018 at 5:04 pm

      I get a kick out of the fact that the average FF gets more $ than the average LEO. Curious as to which group has the more dangerous job. I guess watching football, cooking spaghetti and waxing the fire trucks is more dangerous than trying to control the gangs of Chiraq.

      Reply

      • Posted by Tough Love on August 27, 2018 at 5:12 pm

        My takeaway is that while the 2 scholarly authors moaned & groaned about the predicament in which many States and Cities now find themselves, NEITHER chose to get down to the problem’s ROOT CAUSE.

        For THAT, we had to wait for the comments. Commentator Guy Muldoon stated it very well:

        “As usual in academia, the real root of this situation is not mentioned. The problem is the corrupt alliance between public sector unions (including teachers unions which are rarely mentioned) and the elected officials they support. The elected officials, of course, return the favor and provide more and more benefits to public workers at the taxpayer’s expense. It is simple overspending and lack of political courage. “

        Reply

  2. Posted by Ewald on August 28, 2018 at 10:06 am

    Daly didn’t put the adequate money into the pensions as he was supposed to. His son & nephew borrowed from the police pension. Money placed in pensions should never leave until its time to pay the person rightfully collecting. The same for social security. Government officials should be held accountable.

    Reply

    • Posted by Tough Love on August 28, 2018 at 1:24 pm

      Please define “enough”: ……….

      Is “enough” the amount NECESSARY to fully fund a pension 3, 4, even 6 TIMES greater in value upon retirement than those typically granted COMPARABLY situated Private Sector workers…………… because THAT is how ludicrously generous Public Sector pensions are.

      There is ZERO justification for Taxpayers to be called upon to fund such outrageous pensions (AND/OR benefits).

      Reply

    • Posted by Tough Love on August 28, 2018 at 1:29 pm

      Quoting ………… “Government officials should be held accountable.”

      That’s a hoot (pay us $Billions !).

      No, the FINANCIAL BENEFICIARIES of the Public Sector Union/Elected Official COLLUSION are the Public Sector WORKERS/RETIREES, manifested in the form of their out-sized pensions & benefits.

      So THAT is where Taxpayers must look to right this wrong………… by reneging on the 50% to 75% share of these absurd “promises” that assuredly would NOT have been made in the absence of that COLLUSION.

      Reply

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