Chicago May Be Next

City By The Numbers. But Chicago is far from alone. In many if not most cities and states, politicians have made over-generous commitments to employee unions in return for political support and contributions, and then failed to confront the taxpayers with the costs of those promises. Pension contributions have been short-changed or not made at all – even, cynically, borrowed from the pension funds! so that retirees are now facing the likelihood of PBGC pensions. Just look at Chicago’s funding:

The condition of Chicago’s four city employee pension funds is growing ever more precarious. The firefighters pension fund has assets to cover just 25 percent of liabilities, followed by: Police (31 percent); Municipal Employees (38 percent) and Laborers (56 percent).

Of course, as elsewhere, these numbers are based on highly optimistic assumptions about future returns and ignore the even more burdensome costs of healthcare promises. Chicago is following the Detroit path – I can’t assert that Chicago is next only because there are other competitors for that dubious honor, such as Los Angeles.

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