By
Martin Armstrong 6/24/17
Chicago’s police pension fund won’t
have enough money to pay benefits to retirees in 2021, according to a
projection by Local Government Information Services (LGIS). At the end of
2020, LGIS estimates that the Policemen’s Annuity and Benefit Fund of Chicago
will have less than $150 million in assets to pay $928 million promised to
14,133 retirees the following year.
This is the fate of state and local
pension funds. There is a storm gathering on the horizon and of course these
state and local governments will be raising taxes to try to stay afloat. The
system is collapsing and it is totally unsustainable. This is the very same
crisis that destroyed the Roman Empire.
Comments
Government
employee pension plans are coming home to roost. These defined benefit plans can be terminated
and balances transferred to defined contribution plans like 401k plans.
The funds
that would have gone to pensions could fund an age-weighted plan, where older
police officers get a larger contribution. These accounts would be owned by
each individual participant and vesting should be 100% in 5 years.
Government
retirement benefits need to be reformed to require them to work in come
capacity until age 66, not vested after 30 years of service. Defined benefit
plans are unsustainable, but defined contribution plans are sustainable.
Norb
Leahy, Dunwoody GA Tea Party Leader
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