August 7, 2013

Pension and benefits, no room for mistakes

There is recent news that Chicago, the third largest city in the United States, is facing a huge financial issue. It centers around pension liabilities. The teachers retirement fund is about to go under and the other pension funds are $19.5 billion in the red. The fickle finger cannot totally point to city leaders. The Illinois Legislature makes the rules and has allowed the city to underpay into the funds for years. But in less than a decade the foul smelling bird may come home to roost. The plan is for the city to make up the difference. Chicago’s Mayor Rahm Emanuel says he won’t raise taxes to cover the pension deficit. That leaves cutting benefits one of the only options. Politically, that’s a land mine laden landscape no one wants to cross.

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