That’s what the Economist called Illinois in this article:
Police officers, teachers and other public workers face a brutal reckoning
As the Economist reported:
Illinois is the class dunce, with six languishing [pension] schemes. Chicago Municipal is just 25% funded and the actuaries warn that “the risk of insolvency for the fund has increased”. The actuaries of the Chicago police scheme warn that “this is a severely underfunded plan” with a shortfall of $10bn; the funded ratio is not projected to reach 50% until 2043.
The Chicago Teachers scheme has a shortfall of $13.4bn, and a funding ratio of 47.9% on the basis of an assumed return of 6.8%. Its financial report reveals that a one-percentage-point fall in the discount rate would increase the deficit by $3bn. The private-sector accounting approach would lower the discount rate by around four percentage points.
This is a crisis no one wants to solve, at least not quickly. The Chicago Teachers scheme is aiming for 90% funding, but not until 2059—long after many retired members will have died. New Jersey’s teachers’ scheme is not scheduled to be fully funded until 2048. Such promises might as well be dated “the 12th of never”. The bill for taxpayers seems certain to rise substantially. For the states with the biggest pension holes, political conflict is in store.
Yet, Chicago just awarded the Chicago Teachers Union an overly generous contract that costs an additional $1.5 billion over five years.
“Political conflict already is in store”? Not in Illinois where the Chicago and Illinois governments are mere acolytes of the public employee unions and taxpayers are the serfs.
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