Pension Disaster Looming
The Sun Times did a couple of articles last week regarding the woeful Illinois government pensions (this is one of them). From the article:
- If Illinois government were a private business, it would be careening toward bankruptcy, an influential civic group said Wednesday in a report that identified $106 billion in liabilities that the state has no money to pay.
- The amount equals a debt of $8,800 per Illinois resident, said the report from the Civic Committee of the Commercial Club of Chicago, a nonprofit association of elite business leaders. It said the long-term bills total nearly three times what the state spends each year in discretionary accounts, money not held aside for a specific purpose.
We don't claim to be the sharpest knife in the drawer. Far from it. But we can read different articles and we have been trained at spotting a lot of bullshit just by the nature of our job. When you spend more than you take in, you create debt. Debt creates interest. Interest drives you further into debt, affects bond ratings and raises the cost of doing business.
As we understand part of the problem, some politicians permit "deferments" of payments to pension plans. The deferments are then spent on various social programs in efforts to buy votes from special interest groups. The reverend Meeks attempt to extort $4 billion dollars from the state for "education" (and his threat to run for governor) was a prime example of robbing Peter to pay Paul - and screwing the pension plans.
The above referenced article doesn't seem to do a good job explaining how the pension plans ended up in the sorry state they are in. And the $8,800 debt per Illinois resident is kind of misleading - there are tens of thousands of people in Cook County alone who live entirely on money that has been deferred from various pension plans. How are they going to be responsible for almost $10,000 in debt? And the solution they come up with? Raise taxes. That's a political winner, eh?
As we understand part of the problem, some politicians permit "deferments" of payments to pension plans. The deferments are then spent on various social programs in efforts to buy votes from special interest groups. The reverend Meeks attempt to extort $4 billion dollars from the state for "education" (and his threat to run for governor) was a prime example of robbing Peter to pay Paul - and screwing the pension plans.
The above referenced article doesn't seem to do a good job explaining how the pension plans ended up in the sorry state they are in. And the $8,800 debt per Illinois resident is kind of misleading - there are tens of thousands of people in Cook County alone who live entirely on money that has been deferred from various pension plans. How are they going to be responsible for almost $10,000 in debt? And the solution they come up with? Raise taxes. That's a political winner, eh?
- The problem is not that people are taxed too little, the problem is that government spends too much. - Ronald Reagan
When we retire, we're moving out of state and dumping our $8,800 dollars in debt on someone else. And so are a lot of other people. Would someone care to expound on the pension problems? Succinctly? We don't want book length articles in the comments section.
73 Comments:
That R. Eden Martin guy who is president of the group that calls for something to be done or else "business won't want to be in Illinois" is very wealthy.
From 1974-2005 he was a partner a the 2nd biggest law firm in Chicago. In 2001, the firm tried to dump some old weight from it's partnership. Court papers revealed that partners in 2000 brought home $400,000 a year.
This guy is more concerned about businesses, than the people that PAID into THEIR pension. 20+ years from now I'll be VERRRRRY lucky to get my pension.
You're right when you say that the cause of the massive pension debt is the State's deferment of their payments. It's just part of the large "corruption tax" we pay as residents of Chicago and Illinois. Under the Illinois Constitution these pension obligation must be met. Lucky for us this also applies to our pension. At some point the State will have to freeze it's current defined benefit (DB) plan and institute a defined contribution (DC) plan (401K) for new employees. Eventually the CPD will have to do the same. This is not as bad as you may think. Current members would keep the current plan. Generaly, if you're under 42 you benefit more from a DC plan if the employer matches part of it. Over 42 you want to keep the DB plan. I believe that State employees pay into Social Security. It's unfortunate for them that the Democrates and the media distorted the Presidents plan to allow private investment of SS. Many were scarred away because they were made to believe that investment in the stock market was mandatory and that they would lose all their SS. On average the market rises 10% per year - this year is up over 14%.
You know what pisses me off is that the media reports the pension problems as if its free money that we get after retirement. They leave out the fact that city and county employees contribute every paycheck to the pension fund. I contribute about $250.00 a check to the police pension fund. How much money does the city contribute a check on my behalf? does anyone know exactly?
I posted here about a month ago and will state the same thing again. Our pension fund is good for 15 to 20 years at 50% funded. If you look at the report, it was funded at almost 70% not too long ago. If you are under 50 years of age, you are cooked. I am 60 and leaving soon. If I were a young FOP rep., that would be on the top of the bargaining list. Everyone falls for uniform allowance, quarterly pay, etc. That is just a typical political smoke screen.
Simple actuarial analysis will tell you the problem is that the city contributes zero until you retire. This is the problem. Unionized employees (plumbers, iron workers,etc..) have in their pay package a defined amount that gets put into the pension for each hour that they work. This money then supports the pension for the entire time that they work. The city does not contribute a penny until you retire. Therefore no money is being made through investment(from the city contributions) for thirty years or so. This is a recipe for disaster.
The republicans passed a bill making it mandataory for companies to fully fund defined pensions as they go-- Apr 06. It would be wise to change the wording from companies to employers.
From FOP meeting minutes 2005: "The Mayor now wants to address pension issues in the collective bargaining process ..."
From recent FOP meeting: "We're not gonna talk about pensions, pensions are not a contract issue..."
Go Friends of Politicians!
keep stealing blago and daley give it all away in contracts look at midway airport floor competely falling apart hope new owners find out they are screwd hello walsh shoddy construction daley got his big cut
I was listening to a talk radio station(I don't remember the station name)and the panelists were discussing the state budget crisis. One panelist had the nerve to say that pension costs were the main culpret. He then went on to expound on how generous the state retiree health plan is and how it's better than what is found in private industry. What he didn't say was how small a percentage of their salary that most state employees have to live on. I don't know the exact amount,but I'm sure it's less than 50% after retirement.Just like us,these people PAID into the retirement system and EARNED the benefits they enjoy. I see a pattern forming. Just like United Airlines, The state wants to balance it's screwed up budget on the backs of the retirees. With pension benefits drying up in the private sector,many people have become envious of public sector pensions. The powers that be are now coming for us and OUR retirement benefits. And just like the private sector,the executives will keep their "golden parachutes" while the average worker starves. You best believe that any cuts to the retirement system benefit plan WILL NOT affect the Govenor or any of the members of the legislature. Just the everyday "working joe" trying to keep a roof over his head and feed his family. The battle lines have been drawn. We as public sector employees will have to FIGHT tooth and nail to keep the benefits we've earned. What's happening in Springfield is only the begining. It's only a matter of time before city,county,and other government employees pension benefits come under seige.
All I say is this....if they screw me out of my pension...I will make Achmad and Abdula look like girl scouts. I will have many politicians heads as trophies. And I know for a fact Im not the only one that states this.
The politician is no different than the west side gang banger.
Hence my retiring to Nevada
let's see,
private pensions a thing of the past, social security and public pensions heading off a cliff, personal savings rate negative and the boomers entering retirement age.......perfect storm ?
Deferment of payment into the pension funds is just one reason for this situation. In addition, state politicians feel free to dip into the pension funds to "borrow" money to "balance the budget". None of this "borrowed" money has ever been replaced. Add to that the woeful decisions of the pension board to "invest" in areas where they have lost huge portions of the existing fund.
The State of Illinois has failed to put into the Teachers pension funds the amount of money required by the constitution of Illinois in over 30 years. Is there any wonder why the pension funds are in such bad shape? I can't speak for your pension fund, but the teachers are hurting.
One of the State's plans for avoiding some of this problem is that if a teacher retires early (minimum age 55), no cost of living increases are given for over five years. In hopes that many of these retirees will die in that period of time, saving the state money.
I haven't worried too much about it because my understanding was that our pensions were guaranteed by law. If the pension fund folded, the government would be required to bail it out.
Should I be concerned?
It may not be so simple as to move out of Illinois, as I plan to do. You may get a letter one day that says "heh, you made your living in Illinois and you are going to keep paying us no matter where you live".
What the problem will be is when the FOP agrees with the city to switch from the pension to the 401k systemsa is what are they going to do about the people in the pension program?
For a pension system to work you needed people behind you putting money into the system. When switch over who is then contributing to the fund that will enable the people who are currently working to draw their full pension until the day they pass? How much is the union going to agree to an increase in out contributions saying that it is needed to keep the fund viable for those who came into it at the end of the game?
we sit here and just let it all happen because we are stupid.
We need to get rid of all the link cards and bullshit checks given to baby's mommas for babysitting their own kids. I wonder how much the westside contributes as oppose to drain the system of all the money. It's great to see the democratic fools who approve every check or program to feed these shitheads. Out of every decent person on the westside theres got to be 10 idiots who dont work and collect checks. When I retire I'm moving to the westside and live like a king, collect some pension and sue the CPD for police brutality so that I can get my caddillac.
Did you ever notice that when there are published reports on pensions that they always seem to exclude judges and General Assembly retirees. I for one have no idea of the number of retirees whofitategory but it sure seems to me that they must make up a rather high percentage, high enough to be included in any study. It makes me think of Rostenkowski excluding elected officials from the Social Security reforms of the 80's by stating their Social Security benefits wouldn't make a difference, all the while he was collecting 100% Social Security Benefits while in the joint after pleading guilty to his crimes of Felony theft. For once I would like to see the number of retirees who fit under this category.
since we are on the subject of money,
is there anyone with experience in insurance that can look into us funding our own health insurance? we should have way better benefits for what we pay. in the trade unions the retirees are free. we'll need something better with the soaring price of health care. i think philly police fund themselves. any ideas?
If Pension Funds are being under-funded by the City, State why is it that "WE" keep re-electing those who are borrowing from them and spending "OUR" money?
I wonder how long it will be before a incident similiar to the Madison/Canal occurs when a pensionier (if thats a word) is told he no longer has a pension check will no longer be deposited?
Well with that way GUN legislation is going Politicians will have nothing to fear from the populis cause they will have taken all the guns from us
In a nutshell, the problem is that the various state agencies promised more pension $$$ to various employee's and unions than what is currently funded.
The situation has been brewing for many years. Recent changes in how state government's account for these sorts of things have brought the funding issues into the daylight. Previously, the pension obligations weren't being reported/accounted for at all, hence the great "revelations."
The great state of Illinois is not the only state with these problems. A good article on the whole mess can be found here:
http://money.cnn.com/magazines/fortune/fortune_archive/2004/05/31/370713/index.htm
We know where the FOP stands on this position, they gave the go ahead to the mayor and gave the blessing forgiving over $20 million owed to our pension by the city.
The FOP still hasn't stepped up to the plate on the 2013 issue that is really goin to screw us when we want to retire and have NO medical insurance!
You looking to retire in 7 years? Better start saving now. Private insurance if you can get it will run you over a $1000.00 a month!
sorry off topic; on saturday 9 dec at about 2:30pm 16th dist police car was hit head on by a dui driver in a stolen car.both officer's injured and taken to hospital (both treated release), a 1-man car was assigned, he was being help by other officers because of all the paper work i.e. accident report, vehicle theft,tickets,dui reports,2-arrest, the day watch was told by the 3rd watch capt.Matula that all officers had to go home that the 1-man car can handle all the reports because he the capt was not going to allow any overtime for the 2nd watch except the 1-man paper car. r/o also was told that capt Matula never went to the hospital to visit the officers in the e.r. the paper car worked by him self until the wee hours of the morning on the job, this is because the capt didnt want to allow any one overtime..you guys in 09th dist can have this capt back anytime you want him. he sure sounds like a big company man to me. fucked the 1-man beat car with all that paper work, THANKS CAPT.
Just put as much as possible into the tax deferred. The Chicago Patrolman's Credit Union has great rates on CD's as well. Bottom line, in addition to the pension, you need to sock away as much as possible. Not brain surgery here.
5;32 guys he's trying to scare us, their is not a problem with our fund, The powers to be are trying to scare us keep us talking about the fund that way we don't work on other benefits.10-4
I USE TO WORK FOR A PENSION FUND BEFORE I GOTR ON THE JOB. YEARS AGO DEFINE PENSION PLANS WERE THE NORM. NOT TODAY, MOST PRIVATE EMPLOYERS ONLY OFFER THE DC PLAN. GET USE TO IT ITS COMING TO THE CPD. POLICE DEPARTMENTS IN WESTERN STATES NOW ONLY OFFER THE DEFINED CONTRIBUTION PLAN. PLAN AHEAD, AND SAVE YOUR MONEY. AND WHEN YOU RETIRE MOVE OUT OF CHICAGO,.
Notice that those calling attention to these monster deficits
in the pension plans do not put any blame on all of the crooked and
incompetent politicians who, for many years, have caused this situation. Nor do they suggest that these persons be held liable. No, they blame the generous pension plans, then they merely suggest that the State "balance the budget", as it were, upon the backs of the present and future retirees.
They intend to do so by:
A. Reducing or eliminating retiree benefits, and
B. Taxing retiree pensions in Illinois.
Of the very many retirees who live in Illinois, most continue to do so primarily because Illinois does not tax their pension. Once Illinois starts to tax pensions, it will be Adios for many of them.
When all those homes go up for sale at the same time across the State, real estate will bottom out like the Crash of '29. Homes on the far Northwest side of Chicago
will sell for what they now do in the Rockford area, but there wil be fewer and fewer buyers.
I have 13 years on the job and am 43 years old. Our Pension plan(s) and funding in the City of Chicago are in a SORRY state as they are currently funded at only 51%. To be viable a pension plan needs to be funded at greater than 90%. Currently at the rate of deposits and disbursements the fund will be empty (BANKRUPT) in 2035. I really believe that we must come together on this issue and if necessary circulate a petition to be presented to the FOP to force action by Municipal Ordinance passed by City Council that anytime a city asset is sold for naming rights (skyway, midway airport) that the first thing made whole are the city pension plans. I think our FOP needs to be held responsible to attain this. This needs to be a CONTRACT ISSUE, IT NEEDS TO BE AN ELECTION ISSUE. If you are too young to think about all of this, or not caring enough to think about it, read up on the Orange County California Bankruptcy from years ago, and how all the employees of the county who contributed for years to the plan were left with NOTHING. The lesson here is that Municipalities do go bankrupt it is just not the private sector.
Keep voting democratic. I place the blame directly on them.
schicklegroover said...
A ship, the S.S. PENSION FUND, (not a temporary lifeboat but one your children must live on also) has a leak. You begin bailing it out and no one is all that worried. This goes on a long time and projections by the damage control team are that the ship will be watertight long enough for those over the age of about 50 to die of old age above water. “What about the rest of us and our children,” wonder the soot covered crew in engineering? A few whiners onboard keep saying we should fix the leak instead of just barely keeping up with the flooding. Most think, “why bother when everything is fine, as long as you keep bailing out water? “ Fred O. Plenary, the ship’s Bursar/Entertainment Director says, through a mouthful of steak, that he agrees something should be done but it is not a contract issue. Also not a contract issue was the recent proposal to rename the ship the “S.S. Fuck this Crew,“ but F.O. Plenary fought against that so why can‘t he fight for something much more important? The crew suspects this is bullshit and that the real reason is that he has been sleeping with the Captain in exchange for special duty assignments and extra rations while they survive on a meager diet of hardtack and jerky. The source of the leak widens and it takes more effort to control but the crew can barely bail because they are sick or dying. Captain Flowerpot, who has always hated his crew and barely makes a secret of it, chooses that time to make the already ailing Ship’s Surgeon walk the plank where he is, of course, eaten by the Aldercreatures of the deep, a species that swims in “councils“ and exists in secrecy at 20,000 fathoms. The crew knew this was coming but hoped F.O. Plenary would protect the Surgeon and thus their medical needs AT THE LAST FUCKING MINUTE. Captain Flowerpot knows there is enough room in the lifeboat for him and his handpicked few, so fuck the crew. The crew has always wondered why they are the only ship in the sea who has a lifeboat for the Captain and Officers that is actually LARGER and more SEAWORTHY than the ship itself and why they are constantly ordered to move food and medical supplies to it in the dark of night. They struggle on but having waited too long, no amount of baling (or whining) can keep up because they didn’t plug the leak when it was still possible, didn‘t fight to keep their Ship‘s Surgeon alive and counted on a crooked Entertainment Director and Staff to lead their “mutiny” though they showed time and again that they were only in it for the rations and rum.
This will be no different then the multitude of private corporations in bankruptcy, whose pensions were “insured” by a federal program, the pension benefit guaranty corporation. Don’t believe the State of IL. “guarantees” our pensions The state doesn’t have that kind of money nor the inclination to fix the city’s willful screw ups.
Democrats, you got to love em...
Know this: If you fuck up my pension, I am coming to kill you.
I am honest, sane, sober and retired.
Now you know why the Dumbocrats want to take away our guns.
..you guys in 09th dist can have this capt back anytime you want him. he sure sounds like a big company man to me. fucked the 1-man beat car with all that paper work, THANKS CAPT.
12/11/2006 02:30:16 PM
NO THANKS!!! He's all yours now, we never wanted him in the first place. Good luck and don't count on him to help you out with ANYTHING.
Simple solution,
all revenue collected by red-light cameras, $1.00 per parking ticket, $5.00 per moving violation, 25% of monies collected in vice cases, goes directly into the pension fund.
All pensions, regardless of rank, are based on a partolmans pay rate, (no more golden parachutes for the politically connected) after all, that is all that was promised to them when they were hired. No double dipping within the city pension system. (Townsend, Mauer et al). The system would be self funded in short order.
Now the state gets to pay out for the ridiculous violent video game law suit...more tax money down the drain. If you like to give your hard earned money away to people who will steal some and waist the rest...VOTE DEMOCRAT!
This is by no means a Chicago or Illinois problem alone. Municipalities all over the country are now being advised that their pension funds are woefully underfunded. The simple math is that 20-30 years ago the average retiree would go at about 60yoa and live to 65-67. Now people can go at 52-55yoa and live to about 75 or 80.
I know that this is already on the radar of the big financial institutions that run/advise alot of the big government pensions. The day of reckoning is approaching and it looks like Uncle Sam is the only one with pockets deep enough to bail the funds out, but at what cost to us???
Is it me or are just all 009th district Coppers on Midnights prima donna's?
give me back every single penny i have contributed to the pension and i will gladly move it into a 401k or IRA.
Our pensions are guaranteed by law. Even if every cent of the property taxes have to go towards our pensions we will get them. By the same token we'll be paying hirer property taxes. The powers that be have to reform the pension system. Several years ago the Fed switched to a 401k (DC) based plan. Current employees had a choice of staying in the DB plan or switching to the DC plan (again 42 years old is considered the point were you would want to stay in the DB plan). New employees had to join the DC plan. Now their plans are well funded. Opening the pension to collective bargaining just opens benefits we should already have to negotiation. What we should be doing is demanding reform at the top. Someone has to monitor the fund. Something has to be done to control exempt pensions. And you can forget about the FOP. When this group was running for election they promised increases for POs on Duty Disability (payments that actually come from the City to the Fund then to the PO), once in office they bowed to the Mayor and abandoned the Duty Disabled.
6:38 understand something, our pension fund is ok, Chicago Police officers average life expectancy is 57.3 years
To: 10:53:19
I would like to know where you got that figure from
I wonder how the lack of new recruits and manpower effects the pension plan? No rational person wants this job anymore. Just think how changing the only good thing about this job will effect prospective police officers.
The City of Chicago is a Municipal Corporation, it CAN go bankrupt just as Orange County California did more than a decade ago.
A big problem I see is that it (Chicago) chooses to self-insure. This, in and of itself, is a problem, due to the fact that plaintiffs that sue the City are reaping generous jury settlements, amounts unheard of only a decade ago. You can't turn on the news without hearing that the City Finance Committee and Alder-scum Ed Burke approved a settlement in a lawsuit. $10 Million, $20 Million, $50 Million..where does it end?
I love to hear the lawyers justifying it on T.V. They usually have a smirk on their face..they can't even keep a straight face while spewing crap out of their mouths. They are so full of shit and then think that we actually believe the shit they are spewing out! It's so unreal!
A second problem as I see it is the Deferred Comp. If it was legitimate, we would be able to choose any of the hundreds of funds in the market-place. But we only have maybe 50 to choose from and most of them are shit funds or fund-families. I'm sure the city holds onto the money making interest for a month before distributing it to Nationwide, who than purchases the shares in said funds and "kick-backs" $$ to the criminals running the city. Than the criminals a Nationwide get perks and vacations from the fund managers they do business with.(This is merely a fictional account to give those as paranoid as me some ideas) ; )
I've been in it for more than a decade and just broke even. I'll be lucky to have $200,000 when I retire..$160,000 in contributions and $40,000 in earnings. BIG DEAL!
I'd almost do as good putting it in the bank!
It may not be so simple as to move out of Illinois, as I plan to do. You may get a letter one day that says "heh, you made your living in Illinois and you are going to keep paying us no matter where you live".
12/11/2006 10:27:45 AM
Paying who what? What are you talking about?
Too many bosses draining the fund.
What about PO's, Sgts, Lt's keep our pension and Captains and EXEMPTS start there own. It's NOT LIKE THERE POLICEMEN ANY MORE. JUST POLITICAL HACKS! You can only collect from the police pension fund at your highest rank earned Lieutenant! THEN COLLECT THE REST FROM YOUR OWN FUND!
Start an Exempt pension fund!!!
Corruption is problem with THE PENSION.
RETIRE FROM cpd AS A BOSS, GET A BETTER CITY/STATE JOB AND COLLECT ANOTHER PENSION! Raiding the funds!
Not paying into it according to law!
Courts in Illinois unwilling to address this political issue!
FOP= friends of politicians!
LOCAL AND STATE LEVEL!!!
First and foremost lets get several of the above misconceptions clarified. Our pensions are based upon an average of our 3 highest earning years and the amount you decided to contribute while you made selections in the Academy up to 7%. The City matches those contributions. Regardless of rank, your individual contributions, length of service, age, & earnings determine your pension. The City and the City alone is responsible for the viability of the pension fund. The State & Federal Governments merely are regulatory and oversight in nature. They have absolutely nothing to do with the funding. While the Federal Government does have a Guaranty Corporation, as recent Court rulings have set precedent in the Enron & United Bankruptcy cases regarding the fact that pension contributions did NOT have to be made, thus resulting in a crippling of the pension funds. The City of Chicago is a Municipal Corporation it can go BANKRUPT. So when you look around and see all of the new libraries, police & fire stations, schools, sidewalks, sewers, streets, flower pots, remember the City Council robbed Peter to pay Paul by issuing 20 & 30 year bonds to build all of these infrastructure improvements. A certain percentage of these programs are paid for up front (instead of pension contributions being made). So what will happen in 15, 20, 25, 30 35 & 35 years when all of these bonds come due, and ALL of the city pension plans are short, want to guess who gets paid its the BOND ISSUES by law. THE FOP NEEDS TO BE HELD RESPONSIBLE SO THAT THIS ISSUE & THE ISSUE OF AFFORDABLE HEALTH CARE ARE ADDRESSED IN FUTURE CONTRACTS. REMEMBER THIS IS THE SAME FOP THAT FORGAVE THE CITY CONTRACTUALLY FROM MAKING $24 MILLION IN PENSION CONTRIBUTIONS.
to those who say "it's the law...they have to pay us"
they are ledgislators who make, change and break laws for a living. DON'T GIVE UP YOUR GUNS !!!
Each and every Exempt pension is nothing more than theft from the fund.
Its bad enough that these political parasites suck the blood out of the job but they continue after retirement.
How they love to brag about the huge pensions they they will get.
No pension should be paid above the rank of Lt.
You can bet that the pensions of the political rats who run this state and city are perfectly safe.
Look it up the life expectancy for a chicago police officer is 57.3 years the average citizen is 78, We call it stress, the pension board has the numbers you can also look it up in the pension board book, I'm not say you are going to die at 57 however many many officers die young, look up all your old fop news letter's what are the ages very few live to 78 which is the average citizen all this talk about private sector bs, understand something police officers have a unique job we are the only ones putting on a safety vest.
10:53
Per the DEC FOP newsletter, average age of death for members was 67.3 and that was with a 41yoa and 37yoa in the mix. Not a great sample with only 18 people but if you knock out the those two the figure is almost 70 years of age. As a whole we are living longer just like the rest of society and collecting more pension checks.
Prepare for the worst and hope for the best.
Board of Ed, Cook County and CTA pensions are all in the trouble within 5 years. The line down at Springfield forms to the right.
To 12/12/2006 02:21:16 AM,
I was also perplexed. He does'nt know what the fuck he's talking about. Probably votes for those sellout Hibernians at election time and then later on, beefs! Man do we have some softballs on this job.
We need a casino.
Anonymous said...
It may not be so simple as to move out of Illinois, as I plan to do. You may get a letter one day that says "heh, you made your living in Illinois and you are going to keep paying us no matter where you live".
12/11/2006 10:27:45 AM
Paying who what? What are you talking about?
12/12/2006 02:21:16 AM
What he is talking about is.. with the stroke of a pen by a politician they could theoretically pass a bill whereby if you get a city or state municipal pension and move away, Illinois could still tax you or reduce your pension because you EARNED IT HERE!It has already been tossed around inside the halls in Springfield.
It's similar to the loophole they closed years ago whereby people would go out of cook county & Illinois to purchase a new car to pay lower sales tax. That's why now if you go across the state line or even out of cook county, you pay the rate of tax where you register the car. Cook County and Chicago want to put their hands in your pocket whenever they can.
Go to Indiana to buy Cigarettes in bulk and see what happens if the Illinois State Police or the I.C.C. inspectors pull you over and look in your trunk..can you spell P-r-i-s-o-n!
Same concept!
oh yeah, Fuck Rostenkowski too..he did the same thing with our Social Security with his windfall elimination provision and the other thing which I forgot the name of!
I HAVE THE SOLUTION,
WHEN YOU RETIRE MOVE TO MONTANA,WYOMING OR NEVEDA.THEY DO NOT HAVE THE STATE INCOME TAXES AND THEY DOD NOT HAVE THOSE WONDERFUL WELFARE PROGRAMS THAT GIVE MONEY TO THE BABYS DADDYS MOMMYS CHILD OR THE LINK CARD.
Anonymous said...
All I say is this....if they screw me out of my pension...I will make Achmad and Abdula look like girl scouts...
To the person who posted the above, thank you for making me laugh today. That was very funny and I agree with you!
Worry about pension distributions being taxed? Let's FIRST address whether we will be getting them at all. Isn't that the topic? There are a lot of good points being made by many posters. Would be nice to keep the outrage going till FOP election time. STAY PISSED!
First and foremost lets get several of the above misconceptions clarified. Our pensions are based upon an average of our 3 highest earning years and the amount you decided to contribute while you made selections in the Academy up to 7%.
IDIOT. ILLINOIS STATE LAW REQUIRES WE PAY 9% OF OUR SALARY TOWARDS PENSION. ASK MY EX-WIFES ATTORNEY ...SHE'LL TELL YA.
More wrong imfo
"While the Federal Government does have a Guaranty Corporation, as recent Court rulings have set precedent in the Enron & United Bankruptcy cases regarding the fact that pension contributions did NOT have to be made, thus resulting in a crippling of the pension funds."
The PBGC (Pension Benefit Gauranty Corporation)does not cover government entities. The city contributes nothing to the PBGC. Enron's DC plan was not covered as it could not have been. United retirees did collect from the PBGC.
To the last post of 01:06:23 who stated "idiot, Illinois law requires us to give 9%" WAY TO GET HOSED BY YOUR ATTORNEY & YOUR EX WIFE'S ATTORNEY BECAUSE THE LAW & THE STATEMENT IS THE CITY MATCHES UP TO 7%. Unlike you my money works for me, I do not work for my money. Know (LEARN) ABOUT YOUR MONEY, how it is invested, what the law is be an informed consumer!
What is the FOP doing about this?
Sorry, "anonymous (11Nov, 5:59PM)," but I fail to understand. Your WATCH COMMANDER on MIDNITES made a DECISION to send a good deal of PAPER JOBS to a 10-99 CAR on 1st WATCH?? And you're UPSET with that? I'd have to say that the boss was making the most of what he had to work with! Some of you guys have GOT to grow the hell up.
It would make no sense whatsoever to burden a 10-4 car with paper jobs that have no arrests, or even imminent arrests, attached to them.
Forget the old days of hiding, it was a luxury from long ago that most bosses are not willing to allow dogasses to participate in.
One man cars should carry plenty of reports and extra pens, or just quit!
I saved an article from Crain's in 2004 that said:
"The combined shortfall for the city's firefighters, police officers, teachers and municipal workers totals $9 billion, according to Wilshire Associates Inc., a California-based investment advisory firm.
I went to the website back then and it was up on the site so I printed it out. The report says that the Chicago Policemen's fund was only 56 per cent funded, but the firemen are even worse off the as their fund was only 44 per cent funded. It's probably gotten worse since then.
The report on their website now at
http://www.wilshire.com/BusinessUnits/Consulting/Investment/2006_City_County_Funding_Report.pdf
doesn't list the stats any more, but I bet if you asked they'd send you the old report. I'm taking mine to the next FOP meeting.
Generaly, if you're under 42 you benefit more from a DC plan if the employer matches part of it. Over 42 you want to keep the DB plan.
Why do you think that the "under 42" crowd would do better with any matching v. getting a pension?
How much money does the city contribute a check on my behalf? does anyone know exactly?
ZERO.
It's your money + tax money.
If I were a young FOP rep., that would be on the top of the bargaining list. Everyone falls for uniform allowance, quarterly pay, etc. That is just a typical political smoke screen.
12/11/2006 05:32:52 AM
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bargain for what? For teh city/county/state to do what is legally the thing to do...fund out pension?
Anonymous said...
5;32 guys he's trying to scare us, their is not a problem with our fund, The powers to be are trying to scare us keep us talking about the fund that way we don't work on other benefits.10-4
12/11/2006 03:47:39 PM
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Nothing to see here boys, move along, move along.
or
Do not look behind the curtain!
Orange County California Bankruptcy from years ago, and how all the employees of the county who contributed for years to the plan were left with NOTHING. The lesson here is that Municipalities do go bankrupt it is just not the private sector.
12/11/2006 04:46:43 PM
Crook county couldn't go bankrupt could it??
happyjoyjoyjoy said...
give me back every single penny i have contributed to the pension and i will gladly move it into a 401k or IRA.
12/11/2006 08:49:09 PM
what happens when the stock market tanks, or that mutual fund folds under SEC investigations?
No, how about they just fnd the d^mn pension!
Why do you think that the "under 42" crowd would do better with any matching v. getting a pension?
Actuaries came up with the age of 42 years. But, in a DC plan you take advantage of compounding money whereas in a DC plan the contributions are constant and the percentage of payout increases with time to 75%. There is, however, no upper limit on the earnings you could receive through mutual fund investments. Over 42 Years old you just would not have the time for the compounding to pass the statutory pension increases (2 1/2% per year).
To the last post of 01:06:23 who stated "idiot, Illinois law requires us to give 9%" WAY TO GET HOSED BY YOUR ATTORNEY & YOUR EX WIFE'S ATTORNEY BECAUSE THE LAW & THE STATEMENT IS THE CITY MATCHES UP TO 7%. Unlike you my money works for me, I do not work for my money. Know (LEARN) ABOUT YOUR MONEY, how it is invested, what the law is be an informed consumer!
12/13/2006 03:02:15 PM
RESPONSE:
POLICE PAY 9% OF THEIR SALARY TOWARD PENSION PER ILLINOIS LAW!!! WHAT DON'T YOU UNDERSTAND ABOUT THAT????
IT IS NOT 7%
IT IS 9%
LOOK AT YOUR PAY STUB.
There is, however, no upper limit on the earnings you could receive through mutual fund investments.
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You should have put "could" in itallics.
u r assuming that the mutual fund will only go up, and not crap out right before my retirement.
You are also assuming that we would be permitted to invest in any mutual fund we want. Take National as an example. What has been the biggest gainers in the last few years? Real Estate! And gold has very good in the last couple. Yet, National has no RE or gold funds we could have shifted into while the market changed. Do you have any clue how much money we missed out on?
You are also assuming the City will keep up with their end of the contributions. Yes, this is the same problem with the current problem, but I would find it easier to imagine that the City one day just say, hey we can't match anymore, sorry.
Also the mutual fund industry is NOT the same as "the Market". They are more concerned about making money for them selves than for you and me. Mngt fees comming out of your end win or loose.
As you could imagine, I am more conservative in my finances than maybe you are. I did ok during the tech bubble before I came here. But guess what those funds have not returned to their peeks where I dumped them at.
Thanks but no thanks. I'll take the tried-and-true method collecting a pension, not gambling on my retirement, that worked so well in years past.
The Common Sense Investor: Pitfalls of Mutual Funds
Wow! Just checked back in on this thread and am pleasantly surprised that people are still posting! Maybe there is hope after all. We need to keep this issue at the forefront though. Most coppers don't bother to check old threads. Like the majority of the populace, coppers are dangerously ignorant regarding the hidden costs of investing, the danger of market timing/performance chasing, variable annuity scams, etc. My Year to date performance is 18.20% (after expenses-REAL return) versus the shitty 4.8% the Chicago Fixed option is paying. The majority of city workers are in the fixed option and thus lost out big time (again) this year. I did well this year because, as another poster referenced, I own REITS (real estate investment trust mutual funds) small cap value, foreign developed and foreign emerging markets OUTSIDE the Nationwide plan. My portfolio will not always do so well but it is well diversified and acceptable for my risk tolerance. Of our limited choices within our plan, I recommend one of the three Vanguard Lifestrategy Funds for anyone out there that doesn't want to take time to learn about equities/fixed instrument investing. They are balanced (stocks AND bonds), low cost and run by the only mutual fund company that doesn't play the kickback game at the expense of the investor.
BUT, the point of this thread is our Pension. The city is RAIDING OUR MONEY by not paying in. Telling us not to worry -just put more in deferred comp is like stealing from my right pocket and expecting me to be overjoyed that I still have a little in my left pocket to which I can add to if I just work harder, longer and retire when I'm dead. And to all of you that think we are safe because "it's Illinois law": Yes it is and they are already violating it each time they don't contribute. That is how worried THEY are about the law they will change as soon as they see fit. Do you work the ghetto unarmed but feeling safe because the criminals know murder is against the law and thus won‘t do it?
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