Next School ('huge') Crisis for Chicago: Pension Fund Is Running Dry

NY Times ^ | 9/19/12 | MARY WILLIAMS WALSH

[Libloather]

Next School Crisis for Chicago: Pension Fund Is Running Dry
By MARY WILLIAMS WALSH
Published: September 19, 2012

One of the most vexing problems for Chicago and its teachers went virtually unmentioned during the strike: The pension fund is about to hit a wall.

The Chicago Teachers’ Pension Fund has about $10 billion in assets, but is paying out more than $1 billion in benefits a year — much more than it has been taking in. That has forced it to sell investments, worth hundreds of millions of dollars a year, to pay retired teachers. Experts say the fund could collapse within a few years unless something is done.

“There’s a huge crisis,” said Laurence Msall, president of the Civic Federation, a nonpartisan research organization in Chicago that works on fiscal issues. “The problem does not get easier by waiting. The problem gets bigger, and starts to become an insurmountable obstacle.”

[Libloather]

And even Hussein's out-of-control spending can't fix the problem.

That's a shame.

[dalebert]

I thought they were going to take it out of social security?

[nascarnation]

The Illinois and California budgets are (unspokenly) based on Obama letting them issue federally guaranteed state bonds.

If that doesn’t happen, look out.

[The Antiyuppie]

No wonder these states are going all-out for Bammy. I suspect that if the wheels fall off between 2012-2016, they might get a concrete block instead of a life preserver from the Feds.

[Weirdad]

Important post. Thanks! Bump!

(By the was, you mis-spelled “huge”... he he)

[hosepipe]

The Teachers, Police and Firefighters are bleeding the City of Chicago dry..
The citizens of Chicago are getting what they deserve..

If they didn’t want a criminal enterprise running the city they would vote them out..
Chicago is almost as corrupt as New York City or Newark..

The citizens are like pigs at a pig farm.. being processed..
Used to be they were like Cows getting milked ..
But those days are long gone..

[Godzilla]

I say let it run dry - then put 0bama’s redistribution policy to work and only distribute what comes in to those in the system.

[randog]

The teachers’ union has criticized Chicago for failing to set aside enough money for the pensions, but it has reassured workers and retirees that their benefits are protected by the State Constitution and cannot be reduced. A state law bars strikes in Chicago over pension issues.

"Don't worry--when there's no money you'll get your money because the State Constitution sez so."

Insanity.