In my article yesterday, I argued that Britain was a paradigm of virtue. When it comes to organising its funded and unfunded pensions – in comparison to Chicago (and other American municipalities) I am sure it is.
OK – a little out of date.
But the question for Derek Scott is whether Britain (or I) should be calling Chicago black when Chicago does so much more, so much better. Here he is commenting on my blog.
The UK’s total unfunded public sector pension liability is officially valued at approximately £1.3 trillion. Distributed across the UK population of roughly 68 million, this translates to a liability of about £19,000 per person (or over £45,000 per household).
Former Bank of England economist Neil Record, however, calculates the total unadjusted value of future pension payments that will be owed over the next 80 years at up to £5.8 trillion, or roughly £200,000 per UK household.
Chicagoland’s metropolitan GDP is roughly $923 billion.
In comparison, the UK’s national GDP is approximately $4.3 trillion.
While the entire UK economy is about 4.6 times larger than the Chicago metro area, Chicago still packs an economic punch, producing an economy comparable to entire nations like Saudi Arabia or Switzerland.
And against his argument, is the native “Benefit Jack”. Jack;s argument is not that Chicago can be forgiven but what’s happening in the municipality is unforgivable. Here he is roughly treating his fellow Americans for being what Democratic government’s tends to be.
Duh! Where ya been?
“a leopard can’t change its spots” … an entity’s fundamental character or personality, especially their bad habits, cannot be altered even if they try. Democratic federal, state and local governments all pander to public unions – especially when it comes to financing retirement benefits.
Most recent national example? President Biden, via the Social Security Fairness Act, adding perhaps as much as a trillion to Social Security’s long term liability by eliminating the Government Pension Offset (GPO) and Windfall Elimination Provision (WEP) that applies to millions of federal, state and local public employees whose employer opted out of Social Security.
In terms of Chicago and Illinois, 15 years ago …
https://www.civicfed.org/press-room/StatusOfLocalPensionFundingFY2012
https://www.illinoispolicy.org/moodys-illinois-fy-2012-pension-shortfall-jumps-to-187-billion/
This was, is, continues to be, the “spots” of Democrat politicians who promise public and represented employees more than they are willing to properly fund (ignoring funding deficits while promising wage increases, additional benefits, etc.) as a means to buy votes.
In Illinois, it is complicated by a state constitutional provision that the Illinois Supreme Court has upheld.
https://www.ctbaonline.org/press-room/pension-reform-dealt-blow-illinois-supreme-court
Bottom line, Chicago and Illinois have a more European approach to retirement benefits where the relevant legislative limit applies not only to pension accrued benefit to date (the typical limit applied in private sector defined benefit plans, where the plan sponsor generally retains the right to prospective amend the benefit formula or to freeze the plan) but also precludes changes to the accrual rate for future service for existing workers.
Public employee pensions are not alone! The last group in America to deliberately, intentionally, all but fraudulently collude to underfund their pensions for decades were the labor/management multiemployer plans. How intentional was the underfunding? The funding deficiency and structural issues were clear to all in the American retirement industry decades ago – confirmed by then President Jimmy Carter who signed the Multiemployer Pension Plan Amendments Act of 1980 into law. That was 40+ years prior to the (future) taxpayer bailout of hundreds of those plans via a provision in the American Rescue Plan Act of 2021 signed into law by President Biden.
https://www.abc.org/News-Media/Newsline/taxpayer-bailout-of-multiemployer-pension-plans-and-government-mandated-project-labor-agreements
In my article yesterday, I argued that Britain was a paradigm of virtue. When it comes to organising its funded and unfunded pensions – in comparison to Chicago (and other American municipalities) I am sure it is.
OK – a little out of date.
But the question for Derek Scott is whether Britain (or I) should be calling Chicago black when Chicago does so much more, so much better. Here he is commenting on my blog.
And against his argument, is the native “Benefit Jack”. Jack;s argument is not that Chicago can be forgiven but what’s happening in the municipality is unforgivable. Here he is roughly treating his fellow Americans for being what Democratic government’s tends to be.