"Glennon's facility with translating the Illinois Ruling Class' fantasy math into the tangible human costs it imposes makes him a dangerous man to Illinois pols and a must-read for Illinois residents."
Politically run pensions have been playing in Guaranteed Rate Field for many decades. We just haven’t called it that until now, and the public would never have bought tickets there had it known the true price.
Illinois is falling further behind the curve by ignoring the inevitable. It's priority should be influencing Congress to amend the Bankruptcy Code to make it a fast, efficient, predictable means to a fresh start, with the general public's interest made paramount.
Our elected leaders, who created this mess over many years, owe it to the taxpayers, we who are ultimately responsible for paying the piper, to now face the music and prepare for bankruptcies—perhaps lots of them in our Illinois never-never land.
My favorite from the Rules: "The moment one gets into the area of $25 million and above, let alone a billion, the listener is completely out of touch, no longer really interested because the figures have gone above his experience and almost are meaningless. Millions of Americans do not know how many million dollars make up a billion."
SB-1 state pension reform law voided in its entirety. Earned and unearned benefits protected, including healthcare. All 675 state and municipal pensions covered. Downgrades probably coming. No guidance on any method of reform that might be acceptable.
A bill introduced in Springfield would slap a special three percent annual tax on venture capital funds, hedge funds, real estate funds, private equity and other investment vehicles headquartered in Illinois.
Markets are scheduled to check CPS's pulse on Tuesday with a bond offering in the face of depleted cash, an unspeakable structural deficit, management under Federal investigation, a farcical budget, a half-dead pension and a sell-off of other GO bonds.
Late today, in nine separate press releases, Governor Pat Quinn announced spending totaling $223.7 million from the infamous "Jobs Now" program passed in 2009 that was justified as stimulus for the Illinois economy at the depth of the recession.
How could the treasurer of an Illinois town with an annual budget of $6 million to $8 million steal over $50 million in two decades? Dixon embezzlement provides the toolkit, or the perfect storm, for fraud.
You may be surprised to learn that fiscal year 2013’s full payment of about $6.0 billion was nearly $3.5 billion less than what was required to simply hold the end of fiscal year 2012 pension debt level where it was, even if all else went as expected. In other words, the “full” payment was less than 2/3rds of the payment necessary to maintain the debt status quo.
UPDATE: The author, Mr. Madiar, contacted me, very politely I would add, and suggested I review the more detailed version of his article, which is linked here, and it has a a much lengthier history of the underfunding as he sees it.
Author Tia Goss Sawhney is a qualified health insurance actuary employed by the Illinois Department of Healthcare and Family Services. As such, she is an active participant in the State Employees’ Retirement System (SERS), another highly underfunded Illinois plan.
The solvency of the state and many of its cities, and their capacity to fund schools and other essential services, will depend heavily on arcane accounting assumptions set by pension trustees and pols choosing to ignore professionally established accounting principles.
This month marks the date of full implementation of new accounting rules that will dramatically worsen reported pension problems. Pensioners will be apoplectic. Chicago's unfunded pension liabilities may soar from the commonly reported $18-20 billion to $60 billion, according to one researcher.
Why didn't you tell us? How could you have done this to us? That's the kind cry we'll soon hear from both taxpayers and retirees in many local pensions when they finally realize how little of their pensions will be paid.
The $54 million of taxpayer money Pat Quinn abused through his "anti-violence" program got him far more than the 32,000 votes by which he won the 2010 election. That's about $1,500 per vote. For that, you could get Mrs. O'Leary's cow elected in Chicago.
If Springfield eventually answers this right, an orderly, fair, though painful proceeding would be available to desperate Illinois cities, but getting it wrong would be catastrophic. The debate has started.
The Illinois legislature is considering requiring financial advisors, as a condition to getting any work from state pensions, to disclose how many of their senior staff are minorities, female and disabled, and how many contracts they have with companies that are minority owned or using minority staff for their work. It's wrong-headed and would be nearly impossible to comply with.
Tens of millions of dollars will flow into Chicago out of GrubHub's IPO last week that will be recirculated into other local startups and philanthropy. To Steve Kaplan, Booth and Origin Ventures, our community owes special thanks.
How much of the new revenue that would come from higher taxes on Illinois' rich would be cancelled out because they leave or change their residence? While anecdotal evidence is overwhelming, don't expect your lawmakers to have the most obvious empirical data they should have to answer.
What's being called an "enemies list" of the American Federation of Teachers has been expanded to include supporters of the 'Illinois is Broke' campaign and other local targets, seeking to punish them by denying work from pensions around the country.
Though lesser known and not yet the subject legislative reform, pension troubles facing Illinois municipalities are every bit as severe as those facing the state.
When the General Assembly takes up local pension reform, it must consider the conditions of the plans using up-to-date assumptions. It can’t solve the pension challenges without knowing the true extent of the funding gaps. A sound measure of unfunded liabilities will be a catalyst for discussion on funding discipline, revenue enhancements, benefit recalibration and municipal cost reductions.
WirePoints welcomes Jim Palermo as a guest author. Mr. Palermo is a financial professional, CFA, and Trustee of the Village of La Grange who has paid detailed attention to the pension plight of local towns and municipalities in Illinois. Illinois has some 650 other such local pensions, most of which are badly underfunded, and are often overlooked with all the focus on the state's five pensions and the City of Chicago's.
"Would Cinda Klickna and her teachers' union like their pension investment in Bruce Rauner's firm rescinded, profits disgorged and their vote for it annulled, since they they think it was so tainted? Fat chance."
The new pension deal won't come close to fixing the problems and includes a funding guaranty that will be catastrophic unless gutted.
Public sector unions are putting everything they've got into killing the deal for the opposite reasons -- to keep pensions untouched. Have at it. All the sooner it will be that Illinois finally understands how drastic the solution inevitably must be.
The SEC finds: "[T]he State of Illinois misled bond investors about the adequacy of its statutory plan to fund its pension obligations and the risks created by the State’s underfunding of its pension systems."
In other words, the state lied about its pensions. We're shocked, shocked.
Text of SEC's Order linked here.
State consultant said pensions LIKELY WOULD NEVER be adequately funded, but the state hid that.