Ted Dabrowski and John Klingner
We have a big problem in Chicago. The city’s public safety pension funds have an obligation to pay $68 billion in pension benefits to police and firemen over the next 30 years. To meet those future obligations, the funds need $26 billion in investments right now.
But the funds have just $6 billion in assets today. Absent a bailout, the pension funds will never have enough money to meet their obligations.
And yet – unbelievably – Illinois lawmakers have passed a new bill to make things worse. They’ve increased the obligations of those pension funds by sweetening the benefits of police and firefighters hired after 2010 – so-called Tier 2 workers. If Gov. J.B. Pritzker signs the bill, that $68 billion obligation will jump by several billion, to something over $70 billion.
But assets on hand? Still $6 billion. Meaning the funds will be even more broke.