Chicago “First City” on Pension Shortfall List
December 10, 2013 — A new rating places Chicago’s pension system as the worst funded plan of major U.S. cities, and the mayor wants substantial policy changes to retirement benefits.
Chicago Mayor Rahm Emanuel likes to talk about his city as a thriving center of commerce and a modern transportation hub, but Chicago’s image is threatened by a severe pension crisis. Ballooning city pension payments could result in layoffs, higher property taxes and cuts in services.
Emmanuel wants the state legislature to raise the retirement age for city workers and cut cost-of-living increases for retirees. Lawmakers say they’ll take up the issue next year. Labor unions are promising a fight.
Morningstar Inc. says Chicago has the worst funded pension system of the 25 largest U.S. cities. The system is only 35% funded, compared to New York’s 60% and San Francisco’s 88%.