We don't get interest if you take a monthly payout. If you cash out at the end if your career, you get interest on what you paid in. You don't get interest on the city's contribution if you cash out. If you are termjnated before you are eligible for any pension you get your payments only with no interest.
Sent from my iPhone On Apr 22, 2010, at 12:41, CarlGlas@xxxxxxxxxxx wrote:
Chris, how much interest does your pension fund pay? At 01:32 PM 4/22/2010 -0400, you wrote:What Frannie doesn't say is that the City hasn't paid it's share into the pension plans in over 10 years. This story sounds like a Daley plant to make us look greedy, lazy, money grubbing, etc.I did my part, over 9% of my salary goes directly to the pension fund, the city is supposed to pay 9% into the fund in lieu of paying FICA. The City gets away without paying and then makes us (the annuitants) out to be the bad guys.We'll all feel pension pain Properly funding system will cost taxpayers, city workers greatly BY FRAN SPIELMAN City Hall Reporter fspielman@xxxxxxxxxxxxChicago taxpayers will be forced to dig deeper -- and so will city workers -- to bail out four city employee pension funds that will run out of money by 2030, a Mayor Daley-appointed commission has concluded."There is no low- or no-cost solution to this problem. . . . Deferring action is not a viable option," said a draft of the final report, obtained by the Chicago Sun-Times. "We cannot invest ourselves out of this funding gap. . . . Closing it will require substantial actions [in three areas]: benefits, employer contributions and employee contributions. Employer contributions need to be funded through real commitments, likely including new revenue sources."The pension commission -- co-chaired by Daley's current and former chief financial officers -- does not recommend a specific tax. But the need is staggering.The combined unfunded liability of the Laborers, Municipal Employees, Police and Firefighters pension funds now stands at 42 percent, down from 62 percent just two years ago and 80 percent in 1996.To reach a 90 percent ratio over 50 years -- assuming annual investment returns of 8 percent -- would require $710 million more each year. Sixty percent of that would come from taxpayers, 40 percent from city employees.Without benefit reductions, that would require the equivalent of a 52 percent increase in the city's property tax levy and 8 percent more from city employees."The take-home pay of a $50,000-a-year [city] employee would fall by $4,000," the report states.With reductions -- everything from reduced maximum benefit and a higher retirement age to lower cost-of-living increases and a pension cut for new employees -- the annual gap could be reduced to $510 million.A two-tiered pension system for new and existing employees will "probably be necessary," even though it "poses serious moral issues," could hurt employee recruitment and "might be subject to challenge" in the courts, the report concludes.The report suggests that higher contributions from both sides could be phased in over a four- or five-year period, possibly coinciding with scheduled pay hikes "so employees do not suffer a [cut] in take-home pay.""For the city, new revenue sources can be gradually phased in and taxpayers given time to adjust. These advantages may make the needed changes more politically practical," the report states.In January 2008, Daley created a 32-member commission drawn from labor, business and banking to confront the pension crisis that's choking local taxpayers and gobbling up Chicago's annual property tax levy. Since then, stock market losses and the housing crisis have compounded unfunded liabilities.If the pension funds run out of money, Chicago taxpayers get stuck with the tab.Last fall, Daley responded to the Chicago Sun-Times' "Pension Bonanza" series by saying he would entertain myriad solutions to get the pension monkey off taxpayers' backs.He cracked the door open to raising the retirement age from the current minimum of 50. He said he would consider raising employee contributions and implementing a two-tiered pension system for new and old employees.Union leaders have long opposed a two-tier approach on grounds that it would create a caste system among rank-and-file members.=== ====================================================================CITY PENSIONS: WHO'S PAYING WHAT Plan Employees Taxpayers Total Fire $38 mil. $82 mil. $120 mil. Laborers $16 mil. $17 mil. $33 mil. Municipal emp. $126 mil. $158 mil. $284 mil. Police $91 mil. $186 mil. $278 mil. TOTAL $271 mil. $443 mil. $715 mil. Source: 2009 figures from draft of city pension report=== === ===================================================================BY THE NUMBERS 50 Minimum city retirement age 75% Maximum benefit (of final average salary) 3% Cost-of-living increase (automatic, yearly) $793 mil.Current annual pension contribution by Chicago taxpayers and city employee $14.5 bil.Combined unfunded liability of four city employee pension funds 42%Year all four funds will run out of money 2030 Combined ratio of unfunded liabilities $710 mil.Increased annual contribution required to reach 90 percent funding over 50 years Current employee contribution (of each paycheck) 9.125%Source: Draft pension report, city pension data
