Friday, September 16, 2016

This is How You’ll Bail out Municipal Pension Funds by Wolf Richter / Wolf Street

Check the bills in your mailbox. Happening now in Chicago.

It has gotten so bad that the phrase “Pension Crisis” made it into Wikipedia. It’s the perplexing reality that municipal, state, federal, and corporate pensions in the US and similar schemes around the world are so badly underfunded that it will be impossible to fulfill the promises by a wide margin. By many trillions of dollars.

With state and municipal pension funds in the US, the situation is particularly tricky because the beneficiaries are voters and employees of the government, and politicians of all stripes bought their votes with promises of low contributions and rising benefits. They got away with it for decades because no one cares about “underfunded pensions.” Even the term makes people’s eyes glaze over.

But someone is going to pay. And it’s not going to be the politicians.

This is how they will pay for it in Chicago – the city whose credit rating Moody’s cut by two notches to junk in April last year, and whose interest payments, despite historically low interest rates, have continued to skyrocket as it borrows more and skids deeper into the sinkhole of its own making.

On Wednesday, the City Council approved Mayor Rahm Emanuel’s scheme to bail out its largest and worst-off pension fund, the Municipal Employees’ Annuity and Benefit fund, which would otherwise be insolvent within ten years – and a lot quicker if markets have a hissy fit.

17 comments:

Anonymous said...

What did anyone expect? Cut out the waste and patronage? HAHA

Anonymous said...

I'm confused about where the trillions of dollars have gone over the years from the water system? Their product is free and they make 7-8 billion a year. Wtf?

Anonymous said...

Rahm "No Tie" Emanuel
Really Let Himself Go After He Left D.C.
"NO TIE DADDY": Like A Rabbi With An Un-Cut Dick

Anonymous said...

Yeah, just like Joe Paterno can do no wrong.
This weekend there is a PRIVATE ceremony
Honoring the Anniversary of his First Win.
Invitation Only: Jocko-Homo Types
Penn State is a Football Mill and One Giant
Cult based on one thing: MONEY
Fuck Paterno and Fuck Sandusky

Anonymous said...

you voted for it. now take that big bite of the steamy shitburger handed to you. see how fast the illinois constitution and its guarantees gets spat on when the mass exodus begins. leveraged to the hilt the day is fast approaching when city will not be able to borrow another fucking dime. that includes the idiot claypool running the schools and death bed karen and skuzbag know it all teachers.

Anonymous said...

I say make bitches pay a tampon tax.

Anonymous said...

Joos doing what they do.

Anonymous said...

Just put city employees on obama care and give them section 8 vouchers when they turn 80.

Anonymous said...



Just go to the FOP 7 SITE IF YOU WERE HIRED AFTER 1989!
NO PENSION OR HEALTH CARE FOR RETIREE'S!
SUPPLEMENTAL HEALTH CARE WILL TERMINATE/DENIED TO ALL RETIREES AFTER 1989~~no further pension contributions will be made by the CITY as the pre-1989 ERs DIE OFF!
AFTER 1989 ERS ~ NO DENTAL, EYES,MEDICATION OR MEDICARE SUPPLEMENTAL!! SO YOU DUE FASTER AND ""GET OFF" THE UNDERFUNDED CURRANT PENSION! THE new "491Z" or whatever the CITY will TEMPORARILY name it for AFTER 1989ers will not fund: maintain the currant annuity, therefore they will cut the 89ers , SOON!!!

P.S. IF YOU MARRIED/ LIFE PARTNERED A PRE 89 er : they cannot cover you as a dependant: if you too worked for the CITY and are still working or retired!!

WHY DID THE CITY TELLL THE SUPREME COURT THEY WILL VIOLATE THEIR RULING'S ??


Simple: THEY CAN'T/WON'T MAKE THIS YEARS MINIMUM PENSION PAYMENT TO THE ILLEGALLY UNDERFUNDED PENSION SO~~~~VIOLATE AND APPEAL WHILE THEY DON'T FUND AND STEAL MORE!!

PLEASE PASS THIS ON!
IT EFFECTS YOU!
NOT TOO MANY PRE-1989 ERs are still working AND paying into the fund: most are retired or DEAD!

Anonymous said...

Excellent article, keep up the good work.

Anonymous said...

Death squads eliminate pensioners one at a time. The future looks grim indeed.

the all knowing said...

Buy more guns

Anonymous said...

The fire and police did better then other employees during the detroit bankruptcy,its coming to chicago one day.The funds will go bankrupt.

Anonymous said...

Laborers wont make to 65 most will go out on disability pensions in their 50s. I really hate how new workers have to pay more for other peoples pensions it's just a ponzi scheme. Raise interest rates to healthy levels and these funds would have no problems.

Anonymous said...

If bitches pay a tampon tax, pension fund will make a mint off mr.bourbon street.

Anonymous said...

For the sake of your children and grand kids vote trump.Islam will take over much of europe in the next 30 yrs,we are next if clinton wins!

Mr. SouthSide said...

I agree. Trump is the only way to go.