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Old 10-28-2013, 05:50 PM   #21
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OK, people will probably find this article informative.

Set the record straight on teachers pension fund problems | catalyst-chicago.org
I don't know that I agree with everything in the article but he is correct in one thing: Pensions were not the sole cause of the financial problem and shouldn't be treated as though they are.

I can't imagine that dishonest and foolish politicians were only dishonest and foolish when it came to public pensions, and otherwise were honest, frugal and exemplary public servants.

Oh, please keep Squeezy out of my state. He is an invasive non-native animal and not welcome.
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Old 10-28-2013, 05:53 PM   #22
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Have there actually been any cases to date though where a public pension was cut or eliminated? I mean a single case where someone was getting $40,000 per year or whatever and the government said we don't have enough money and are only paying you $20,000?

I haven't heard of one case, which makes me suspect the wisdom in taking lump sum.

Now the private sector is another story. Ford can't make someone driving a 2005 F150 pay another $1000 so it can fund promised pensions where a city can enact a levy or raise some taxes.
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Old 10-28-2013, 06:17 PM   #23
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Have there actually been any cases to date though where a public pension was cut or eliminated? I mean a single case where someone was getting $40,000 per year or whatever and the government said we don't have enough money and are only paying you $20,000?
Yes, Google "public pensions reducing benefits".
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Old 10-28-2013, 06:28 PM   #24
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Originally Posted by Cut-Throat View Post
OK, people will probably find this article informative.

Set the record straight on teachers pension fund problems | catalyst-chicago.org

A good article even if there is fair amount of CYA.

But I still disagree that pensions aren't generous by comparison to private sector.

From I can tell prior to the 2011 pension change a Chicago teacher could retire at 55 (more realistically 56 if they started right out of college.) after 34 years and retire. They will be eligible for 75% of the 4 highest years pay.

Now according to this article in Slate the mean teacher salary in Chicago is $74,236, but of course somebody with 34 years is going to make well over the average. I'd guess it is 100K, but lets say it is only 90K. So the pension will be 75% of 90K or $5625 a month. An annuity for 56 year old female in IL will cost ~$1,167,000. But that is for a fixed annuity CPS teacher pension increase by 3% a year. I am not sure what the factor for a 3% pension increase should be over nearly 30 years. Life expectancy for a 56 year female is 28 years. I'll make a wild ass guess that $1.7-2 million would get you an annuity paying $5625 and increasing 3% a year.

Now a teacher starting off at 30K and after 30 years topping out at $90k salary and contribution 9% of their salary and earning 8% a year (per the historical CPS returns) will have saved $700K after 34 years. The shortfall $1.1 million to 1.3 million is the amount the state would have to match of the teacher pension. This implies a contribution of 14% to 16%. Now if we compare this to typical 401K match of 3-6% in the private sector, it is easy to reach the conclusion the pension are generous. My rule of thumb is that public service pension are equivalent to 10% salary increase.

Now this doesn't excuse the borderline criminal behavior the elected official in not contributing to the pension fund, but I think if the public knew how expensive pensions really were perhaps thinks may have been different.
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Old 10-28-2013, 06:31 PM   #25
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Have there actually been any cases to date though where a public pension was cut or eliminated? I mean a single case where someone was getting $40,000 per year or whatever and the government said we don't have enough money and are only paying you $20,000?

I haven't heard of one case, which makes me suspect the wisdom in taking lump sum.

Now the private sector is another story. Ford can't make someone driving a 2005 F150 pay another $1000 so it can fund promised pensions where a city can enact a levy or raise some taxes.
Public employees in Cedar Falls Rhode Island took a big hair cut in their pension when the town went bankrupt as much as 75% for the top guys fire chief etc but even folks with modest 24K a year pension were cut almost in 1/2.

I'd be shocked if public employees in Detroit don't see a significant reduction in benefits. I also remember some states (Ohio) freezing cost of living pension increase during the crisis.
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Old 10-28-2013, 06:44 PM   #26
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I think the teachers actually only contributed 2% not 9%. The district matched the 2% with another 7% which is where the 9% figure comes from.
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Old 10-28-2013, 06:47 PM   #27
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I think the teachers actually only contributed 2% not 9%. The district matched the 2% with another 7% which is where the 9% figure comes from.

I don't know what the real truth but if you are right this statement is incredibly misleading.

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Our members have never missed a pension payment, investing 9 percent of their salary from each paycheck toward retirement.
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Old 10-28-2013, 06:56 PM   #28
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Here is a state that could open the gates:

CA mayors want voters to let cities cut public pensions | Represent! | 89.3 KPCC
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Old 10-28-2013, 07:11 PM   #29
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DWs pension is $21k. A little more information on the type of teaching job the person in the example had is essential. Had DW worked at certain private institutions, or certain communities inhabited by a wealthier clientele, she could have have made a higher wage. She preferred working with disadvantaged kids. Nor is my pension, as a recently retired public worker, much better. It's ignorance to post one high wage, and assume it to be a good example. And in Ohio, teachers don't particate in SS, and the 401b (forget the correct numbers) plans there school's come up with tend to be crap. Nor do schools contribute to that plan. Don't assume a 75% pension rate.
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Old 10-28-2013, 09:24 PM   #30
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... It's ignorance to post one high wage, and assume it to be a good example. And in Ohio, teachers don't particate in SS, and the 401b (forget the correct numbers) plans there school's come up with tend to be crap. Nor do schools contribute to that plan. Don't assume a 75% pension rate.
But this thread was about Illinois pensions, and I believe the numbers that clifp posted are accurate for Chicago Illinois teachers. No assumptions that I see, other than a bit of rounding.We could look up specific numbers, and I think you'd find they are right in line with what he posted.

Back to the OP - us native Illinoisans didn't bother to post anything about "Squeezy the Pension Python", because that silliness is just business as usual here in Illinois, nothing notable about it at all.

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Old 10-28-2013, 09:31 PM   #31
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Quote:
Originally Posted by Fermion View Post
I think the teachers actually only contributed 2% not 9%. The district matched the 2% with another 7% which is where the 9% figure comes from.
I don't know what the real truth but if you are right this statement is incredibly misleading.

Quote:
Our members have never missed a pension payment, investing 9 percent of their salary from each paycheck toward retirement.
According to the city of Chicago's own web site, it's true:

City of Chicago :: Just The Facts

Quote:
How Much Do City Employees and their Employers Contribute to their Pension Benefits?

Chicago Teachers: 9% (*CPS pays 7% under collective bargaining agreement, and 2% is deducted from employees’ gross pay)
And of course, CPS (Chicago Public Schools) is funded by taxpayer dollars. I guess you need to recalculate your figures?

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Old 10-28-2013, 09:59 PM   #32
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I find it interesting that they say that they will not qualify for SS... well, they COULD if the elected officials voted to have them in the SS system...

But that would mean that they would have to match and they could NOT delay that match....

Yes, I think the pensions were/are to high for some.... and the politicians are the most to blame... they promise something that they cannot deliver and do not try and fix it when it is staring them in the face.... as long as you have money to send out, everything looks good....
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Old 10-28-2013, 10:49 PM   #33
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With a little luck they can get the voters to let them cut past payments to vendors and people who contracted work with the city. "Acme Asphalt, we could not really afford to pay you the $500,000 we contracted for road repairs five years ago, so we are taking back $150,000. If you don't pay us in 30 days we will seize your property and sell it."
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Old 10-28-2013, 11:09 PM   #34
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With a little luck they can get the voters to let them cut past payments to vendors and people who contracted work with the city. "Acme Asphalt, we could not really afford to pay you the $500,000 we contracted for road repairs five years ago, so we are taking back $150,000. If you don't pay us in 30 days we will seize your property and sell it."
Well, technically the people the city should go after are past taxpayers, even if they have died or sold their house and moved to another state. If you didn't pay enough tax back in 1995 for the pension system to be fully funded, you owe money now, even if you are no longer living in Illinois or are dead.

If I just moved to the city, why should I be shouldered with all of the problems of the previous tenants? (yeah, I know the answer is don't move there)
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Old 10-28-2013, 11:17 PM   #35
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Well, technically the people the city should go after are past taxpayers, even if they have died or sold their house and moved to another state. If you didn't pay enough tax back in 1995 for the pension system to be fully funded, you owe money now, even if you are no longer living in Illinois or are dead.

If I just moved to the city, why should I be shouldered with all of the problems of the previous tenants? (yeah, I know the answer is don't move there)
Good point.

Besides, I am sure that wherever you moved from probably could use more money anyway, so one way or the other you can pay your 'fair share'. Nobody should be left out.
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Old 10-29-2013, 03:36 PM   #36
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I read in the paper yesterday that the Illinois teacher pension system last fiscal year had over a 12% return and yet still added more money to the unfunded liabilities... At 40% funded, it definitely can't earn it's way out of the problem. Sad situation to be in if it is the pension system you are counting as your retirement.
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Old 10-29-2013, 04:29 PM   #37
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If only it were just Pensions...
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Old 10-29-2013, 04:41 PM   #38
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If only it were just Pensions...
My old hometown, Springfield, il with 3 days cash on hand. That's because you never know when the mob wants their money in 72 hours...
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Old 10-29-2013, 05:42 PM   #39
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Oh, it's for the children............................

I live in the peoples republic of IL and I missed that. We have no money in this state.

I work with a guy...his wife is a retired teacher from Chicago. Her pension is 98,500/year.
Yep. If anyone knows a representative sample of IL retired teachers, it doesn't take a genius to figure out where the money is going.
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Old 10-29-2013, 05:50 PM   #40
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I am assuming most of these teachers would have a hefty 403b account since they were only contributing 2% of their salary to the pension fund and didn't have to contribute 6.4% to social security?

This might ease the pain a bit if the pension payments need to be reduced.
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