Chicago citizens’ funds are only a drop compared to others for the Chicago Taxpaying system. The most money to be made is found in the Chicago Police Department and its “traditional” retirement pension.
Unlike most jobs unrelated to the Chicago justice and political system, the Chicago Police Department promises 3 percent of their original payment regularly after they retire. This is described as COLA(cost of living) by the more well-informed, and by others seen as a pension plan.
CPD officers can receive almost $70,000 to $100,000 in pensions a year and this could be doubled when applied to spouses. This is all without including the fact that most reapply for a city job while collecting these pensions.
Chicago Pension Stirring Pot
Chicago’s system is comprised of a “pay to play” system. And it shows the debt accrued to the city’s financial department from underfunded pensions and retirement funds. More specifically over 40 billion dollars in debt is weighed so heavily over Chicago’s shoulders that it was labeled the financial “sinkhole city.
Approximately, 68 percent of the city’s total debt comes from massive unpromised payments in pension liabilities — 2 percent from similarly retiree health insurance.
The “underfunded” aspect of pensions doesn’t mean Chicago does not have enough money to allocate fully to the pensions budget. Instead, the shortfalls lie in Chicago leaders and elected officials.
Truth in Accounting(TIA), a nonprofit organization based in Chicago that provides financial transparency about the city’s condition, analyzed Chicago’s debt in 2018. To be eligible citizens, Chicago promised $39.8 billion in retirement benefits, $30.1 billion in pensions, and $686 million in retirement health benefits.
Shelia Weinburg, the Truth in Accounting founder and CEO addressed how easily the city neglects to follow the plans it sets for itself.
They should have been funded as the employees got them and as the state approved them. Instead, elected officials chose to use that money for other government services or benefits or didn’t raise taxes.
Similarly, Police pensions are an unaccounted tangle of rules. Only recently have states initiated laws to include the possibility of forfeiture when the recipient commits a felony. This is not the case for every state in the U.S. Luckily Chicago is one such city that signed into law an act restricting police chiefs from double dipping in pension by retiring from a Chicago city position and working outside the city in another state position.
But that has a fine print to it as well: it only affects new hires after Jan. 1st, 2019.
How many “plans” will it take to fix this?
In Mayor Lightfoot’s campaign, she proposed a swift “action” plan to absolve Chicago debt concerns and underfunded pensions. The previous mayor left the city with a “pension Advance Fund”. A proposal that claims to work as a future new city fund and direct revenues into it. But this act would require City Council budget action on its end.
Past mayor, Rahm Emanuel, promised to increase taxation during his terms as a part of the plan of generating extra money to fix the city’s debt.
And now, in 2023, the pension liability rose 5 percent, now $35.4 billion across Chicago’s four retirement funds.
Undisclosed city worker of Chicago’s Unemployment Office downtown asserts the mentality of most people affected and rely on retirement funds.
It’s disturbing – the letters we get from people basically pleading for something that should be given freely. Especially during covid – I’d review letters from people who vent their struggles – disabilities, victims of assault – people who have no home rely on a city that seems to not care.
For many citizens, the city debt seems like something only those with enough money have to worry about. But unfortunately, every failed plan will increase the burden on Chicago taxpayers. In the past, proposed cutbacks on nurse pensions have already been proposed, and soon this might increase.
Written by Brielle Buford
Sources:
CHICAGO BUSINESS: Chicago pension debt rises to $35 billion as mayor hunts for fix
Forbes: Chicago Fire, Chicago Police, Chicago Pensions: Why A COLA Change Isn’t A Cure-All
Illinois Policy: CHICAGO COPS RETIRE TO DODGE PUNISHMENT, COLLECT 6-FIGURE PENSIONS
Featured and Top Image Courtesy of Christopher‘s Flickr Page – Creative Commons License
Inset Image Taken by Scott M. Allen Courtesy of US Department of Labor‘s Flickr Page – Creative Commons License
