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What happens if Chicago pension funds run out of money?
Tribune ^ | November 16, 2010 | Jason Grotto

Posted on 12/05/2010 4:08:04 PM PST by george76

Illinois Constitution raises questions about who's on the hook if they become insolvent.

With some city pension funding levels dropping below 40 percent, a question arises that seemed unthinkable just a decade ago: If a pension fund runs out of money, who pays for the retirement security promised to city workers?

The answer is complicated by changes to the Illinois Constitution in 1970 that made retirement benefits for public employees a contractual guarantee that could not be diminished.

Union leaders say pension benefits are guaranteed not only for retired workers but for those still working, and that if a fund went under, the city would be required to find a way to make the fund whole — by levying more taxes, borrowing, cutting services or all of the above.

(Excerpt) Read more at chicagotribune.com ...


TOPICS: Business/Economy; Crime/Corruption; Extended News; Government; News/Current Events; US: Illinois
KEYWORDS: pensionbenefits; pensionfunds; pensions

1 posted on 12/05/2010 4:08:10 PM PST by george76
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To: george76

Well the federal government will bail them out, since they have been bailing out foreign banks and all kinds of corporations.

ugh


2 posted on 12/05/2010 4:09:08 PM PST by GeronL
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To: george76

Same that occurs with Other DNC/ SEIU enclaves.

It gets covered by the other cities and states.

The DNC and it’s constituents know full well they can increase debt into the the trillions here in CA.

We have 6 Billion of the other states monies know.

Chicago knows this too.


3 posted on 12/05/2010 4:11:57 PM PST by NoLibZone (Homosexuals oppose diversity.)
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To: george76
the city would be required to find a way to make the fund whole — by levying more taxes, borrowing, cutting services or all of the above.

Withdraw police protection to the Loop and Gold Coast, ditto garbage collection, close the public schools.

4 posted on 12/05/2010 4:12:32 PM PST by NativeNewYorker (Freepin' Jew Boy)
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To: george76

Hey, I am a member of Cal-PERS (left the state 11 years ago). I just ask to get my money back with a reasonable ROI (6% is what they publish).

I am more than happy to walk away from it so long as I am not robbed (like with Social Security which is robbery — no one under 55 will see a dime of it).


5 posted on 12/05/2010 4:12:47 PM PST by freedumb2003 (Lt. Drebin: Like a blind man at an orgy, I was going to have to feel my way through.)
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To: george76
Pension funds, as well as social security and all unfunded liabilities can always and readily be paid no matter what the total dollar amount is.

The problem though, is that paying these funds might need to be done with near worthless money in an atmosphere where the only assets of value are made of brass and lead.

6 posted on 12/05/2010 4:14:38 PM PST by C210N (0bama, Making the US safe for Global Marxism)
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To: george76

Hmmm.....is Illinois able to levy a tax on pensions? They may be obliged to pay, but they could turn around and take the money back.


7 posted on 12/05/2010 4:16:09 PM PST by proxy_user
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To: george76

Illinois is now or will be taxing SS benefits. So, with more taxing to pay pensions they can tax so they can get tax money to pay pensions they can tax. Or something like that.


8 posted on 12/05/2010 4:19:40 PM PST by ReverendJames (Only a lawyer and a painter can change black to white)
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To: george76

Does the union contribute to Obama’s brand of socialism? There’s your answer.


9 posted on 12/05/2010 4:19:49 PM PST by OrioleFan (Republicans believe every day is the 4th of July, democrats believe every day is April 15.)
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To: george76
Is anyone asking where the money has gone? Was it ever invested? Is there any accountability? Will the culprits who gave it all to the DNC be held accountable and their assets sold to help reimburse the pension fund?

I am so sick of the corruption with the unions and the Fed and State Governments.

This has got to stop. There is not enough money to cover the amount spent by these corrupt governments. We are falling into the same abyss that is crippling other South American and European nations. WHEN WILL THIS END?

10 posted on 12/05/2010 4:21:20 PM PST by mia
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To: george76

Barry can bail out Chicago with his “stash of money”...


11 posted on 12/05/2010 4:22:23 PM PST by tips up
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To: george76

More folks will move to Colorado and finish screwing up that state too?


12 posted on 12/05/2010 4:23:02 PM PST by Paladin2
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To: proxy_user
Hmmm.....is Illinois able to levy a tax on pensions? They may be obliged to pay, but they could turn around and take the money back.

Illinois has a flat 3% income tax. Pensions and other retirement accounts aren't taxed.

13 posted on 12/05/2010 4:23:59 PM PST by EVO X
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To: george76
What happens if Chicago pension funds run out of money?

It will be Detroit?

14 posted on 12/05/2010 4:28:05 PM PST by Maceman (Obama -- he's as American as nasi goreng)
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To: george76
The answer is complicated by changes to the Illinois Constitution in 1970 that made retirement benefits for public employees a contractual guarantee that could not be diminished.

And all the little Illinois boys and Illinois girls must get $56,000 worth of Christmas presents. (even if they're Muzzies, or have only arrived recently on these shores)

ML/NJ

15 posted on 12/05/2010 4:29:04 PM PST by ml/nj
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To: proxy_user

Lay a windfall tax on government union pensions. Do the same on their wages. Collect it via withholding at the time of the checks. Set the rates high enough to make the make the numbers work. Tell the voters, honestly, you’re just doing what the union said - taxing the rich more!


16 posted on 12/05/2010 4:33:31 PM PST by JohnBovenmyer (It's not an election, it's a restraining order! - P.J. O’Rourke)
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To: george76

I’m fed up with unions. I think they all should be disbanded. My brother is an retired GM employee & we both agree that the management is nothing but crooks, liars & thieves. The union has outlived its usefulness & not needed anymore. They take the union dues not to help the employees paying the dues but themselves. I feel sorry for the workers but their outrageous pay is coming home to roost.


17 posted on 12/05/2010 4:34:31 PM PST by jrcats (Sarah Palin's Alaska beats Obama's D.C. Disaster!)
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To: GeronL
What happens if Chicago pension funds run out of money?

The fed will create some electronic money and shuttle it to chicago under the table. Nothing will happen, life will go on...for now.

18 posted on 12/05/2010 4:42:00 PM PST by farmguy
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To: george76

No legislative body is bound by the acts of a previous legislative body...PERIOD. Just ABOLISH All retirement benefits for ANY PERSON that is a member of a UNION and has been a beneficiary of Collective Bargaining.

When Unions started They Were Responsible for Pensions, they can be again.


19 posted on 12/05/2010 4:43:22 PM PST by eyeamok
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To: george76
What happens if Chicago pension funds run out of money?

I start to laugh uncontrollably as I salute the 2nd law of thermo-dynamics?


Frowning takes 68 muscles.
Smiling takes 6.
Pulling this trigger takes 2.
I'm lazy.

20 posted on 12/05/2010 4:50:01 PM PST by The Comedian (Government: Saving people from freedom since time immemorial.)
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To: george76

Just steal private retirement savings.


21 posted on 12/05/2010 4:52:01 PM PST by lacrew (Mr. Soetoro, we regret to inform you that your race card is over the credit limit.)
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To: george76

I’ll tell you who they are going to TRY to put on the hook for it... I’m seriously contemplating — if the Fed’s do start bailing out states like California, New York, Illinois, and Cities like Chicago — just refusing to pay income taxes any longer. Tax revolt. Of course, my wife would probably leave me. I would probably go to prison, if the IRS didn’t find a way to raid my house and get rid of me outright, so they could just confiscate all my stuff....

Oh, did I type that out loud? How long before the “Tea Parties” actually DO start throwing LITERAL tea in the bay, or REFUSING to pay the fees and taxes, or buy the stupid government “stamps?” When will the insults and injuries be ENOUGH!?!


22 posted on 12/05/2010 5:06:37 PM PST by patriot preacher
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To: The Comedian
I start to laugh uncontrollably as I salute the 2nd law of thermo-dynamics?

You're a funny guy!

23 posted on 12/05/2010 5:07:00 PM PST by DuncanWaring (The Lord uses the good ones; the bad ones use the Lord.)
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To: eyeamok

yes but when they were responsible for pensions they let the mob in!


24 posted on 12/05/2010 5:14:29 PM PST by Reily
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To: mia
"Is anyone asking where the money has gone? "

My cousin is/was President of an Illinois teachers union. The state raided/spent it.

Seems Illinois/Chicago don't even give out IOUs. They just pay some bills, of their choosing, as revenue allows.

Yes, he blames Blotto and the crook legislators.

Oddly, he does not blame his pension fund managers. Evidently, they have no authority over what the legislature does with the funds. Taxes come in, the legislature doesn't put it in the pension funds.

yitbos

25 posted on 12/05/2010 5:29:58 PM PST by bruinbirdman ("Those who control language control minds." -- Ayn Rand)
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To: bruinbirdman

Are instances like this ever discussed with the citizens of that state? Like, do the people in the state have a forum to discuss this abuse of power? This is robbery and/or misappropriation of funds. Are people so stupid that they sit back and allow this to happen? Crimeny. . .


26 posted on 12/05/2010 5:42:12 PM PST by mia
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To: The Comedian

All Chicago pension money can be paid in Zimbabwe dollars.


27 posted on 12/05/2010 5:43:21 PM PST by reg45
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To: The Comedian
I start to laugh uncontrollably as I salute the 2nd law of thermo-dynamics?

Before or after the celebratory stogie?


28 posted on 12/05/2010 6:05:42 PM PST by Charles Martel ("Oh, Bother", said Pooh... as he chambered another round.)
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To: george76

Fat Tony kills Mayor Quimby?


29 posted on 12/05/2010 6:05:55 PM PST by Secret Agent Man (I'd like to tell you, but then I'd have to kill you.)
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To: Charles Martel
;-)

I *am* society's only protection...

And so are you.


Frowning takes 68 muscles.
Smiling takes 6.
Pulling this trigger takes 2.
I'm lazy.

30 posted on 12/05/2010 6:15:02 PM PST by The Comedian (Government: Saving people from freedom since time immemorial.)
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To: george76

Thursday’s Glen Beck show covered this. California, Illinois, New Jersey, and New York are all in this situation, and will all be bailed out so long as they end up insolvent while King Hussein is in power.

...which will mean further devaluation of the dollar.


31 posted on 12/05/2010 6:20:29 PM PST by Yet_Again
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To: C210N

Your analysis may be true for federal obligations, but certainly not for those of the states or local governments.


32 posted on 12/05/2010 6:51:47 PM PST by MSF BU (YR'S Please Support our troops: JOIN THEM!)
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To: Yet_Again

How will BHO bail them out?


33 posted on 12/05/2010 6:53:10 PM PST by MSF BU (YR'S Please Support our troops: JOIN THEM!)
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