Monday, July 16, 2012

Pension crisis continues: part 6

The pension crisis--how bad is it? Scary bad--

Pension crisis continues: Dramatic rise in debt for Chicago-area pension plans - "The debt from 10 Chicago-area pension plans swelled more than 600 percent to $27.4 billion between 2001 and 2010, according to a study released Monday by the nonpartisan Civic Federation. That's $8,993 for each man, woman and child in Chicago, according to the report. The shortfall comes on top of more than $83 billion in unfunded pension liabilities at the state level, driving the cost up to nearly $15,000 per Chicagoan, the report shows. "While they're debating what to do about the state funds, these local funds are continuing to decline," said Laurence Msall, Civic Federation president. "Inaction during the past 10 years means it's not just politically more difficult to fix this problem but also mathematically more difficult." The report bolsters the urgency for pension reform expressed by Mayor Rahm Emanuel and Gov. Pat Quinn in recent months. In May, the mayor traveled to Springfield to testify before a House pension panel, saying essential city services and education reforms would suffer if dramatic changes aren't made to the city's pension system. "Chicago's quality of life and economy will falter," Emanuel warned, calling for raising retirement ages, increasing employee contributions and freezing cost-of-living increases for retired workers for 10 years, among other measures."

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