The City of Chicago pension
liabilities have been analyzed by everyone in Big Business-the Civic Federation,
Gov. Rauner and every journalist can now attest to trying their hands with this
mess. The Big Business solutions to
overturn the State Constitution to cut pension benefits which were promised at
hiring is not feasible. A second
solution is to roll over the pensions into 401K type savings funds with
increased pension contributions from employees.
Again, not feasible while the state constitution is upheld. Lastly, withholding COLA “raises” will save
the 50% underfunded pensions of the system.
The idea of cutting COLA raises while Americans that never worked
receive the stipend seems beyond unfair, it sounds unlawful. The average and actual 3% yearly raise in
inflation would diminish the pension payments until people were living below
poverty levels. Government workers
living below poverty levels isn’t the headline any Chicago politician would
like to see. The pension liabilities can
be solved through Pension Bonds-the new public savings bond.
Alternative Solutions: Public Bonding That Will Save Pensions
While the Chicago Board of Trade
exchanges millions in City bonds, the average Chicagoan cannot afford to be
part of the interest laden surplus generated by big bond trades. Average Americans, the Middle-Class
investors, still buy US Savings Bonds with an average $25-$100 bond purchase (US
Treasury). The key to funding the
billions in underfunded City pensions is to create an average savings bond that
average people can invest for their future.
The public savings bond is drafted from the US Savings Bond Series
EE. That’s the bond Grandma still
buys. Chicago’s current population is
2.7 million with the greatest percentage in the Middle-Class. The Middle-Class is the target audience for
this type of bond. The inner target is
presenting the bonds to the pensioners and current City of Chicago employees:
nearly 156,000 bond sales (City
of Chicago FAQs). The bonds can
support average people with long term savings.
The Public Pension Savings Bond can generate the millions in long term
funding that is needed. It will also
increase the amount of interest the actuaries of our current pension system is
accruing. The Middle-Class is the
As we venture into the progressive 21st century,
we must make progressive policy.
Financial policy has and will continue to be built around the few Big
Business analysts and investors. Those
investors do not have the interest of the majority of the population of Chicago
or the nation as witnessed in the tragic financial situation since 2008. Public employees can no longer rely on the
government to secure their retirement as the governments were not careful
watchdogs of the pension system. Pension
savings Bonds allow the City of Chicago to move out of crisis with the
collaboration of the pension contributors.
We must work together today for the best tomorrow.
Please read the link below for the downloadable policy proposal.