Ask Terry Questions Chicago pensions problem

Chicago pensions problem

By Terry Savage on July 07, 2024 | Wild Card

From radio interview, you are expecting problems with Chicago City pensions in 4 or 5 years. What is the worst that could happen if bankruptcy is declared? My family has a Water Reclamation and a Municipal Employee pension. Our ages are 70 years old. No Social Security. Is there an insurance policy like FDIC for banks deposits on these pension?

Terry Says

This is a serious issue — and I do not speak lightly about it.  I have been warning about the underfunding of Chicago municipal pensions for more than 15 years.  The Federal government does NOT insure municipal pensions.  That’s why it’s so serious.  The only way a municipality has to contribute to a pension fund is to raise taxes.  But Chicagoans already face high taxes.  It would have been a lot easier if  they had started to work on this problem years ago.

This is not the fault of any one administration.  But our city pensions are funded at only around 25%, while most municipalities are funded at a minimum of 70%.

If you want full details, read this authoritative report:  Chicago’s Shaky Pension Funds Face New Hit From Looming Downturn – Bloomberg




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