(Photo credit: Wikipedia)
OpenPensions.Org, provides access to all pension data, analysis of what changes to contributions or benefits would cost and how changes would impact employees. This is the first time that the status of the County's pension, the unfunded liability and possible solutions will be available to all - taxpayers, employees, retirees and the civic and business community. Our Truth in Numbers report details how the Cook County Pension Fund fell from over 90% to less than 60% funded in just 10 years. It also presents a set of solutions that will be the basis of engaging all stakeholders across the County.
Every person in the County relies on a functioning Court system, the Sheriff's office and other vital services the County provides. If we do not address the growing unfunded liability at the pension fund, future contributions will either cause a crushing increase in property taxes or will crowd out funding for County Services. Neither one of those paths is acceptable. There are over 15,000 County retirees and approximately 23,000 active employees, 30% of which are eligible for a pension today. Without reform the pension fund will be insolvent in 2038 and be unable to pay pension benefits or retiree healthcare. Insolvency is also not an option. There are no shortcuts or quick fixes that can trump starting with the facts, collaborating with labor, retirees, citizens and civic leaders and being willing to make tough decisions to overcome a problem that has been a generation in the making.
CHICAGO - Today, the Cook County Pension Fund released its 2011 financial and actuarial reports showing that the pension funded status is now 57.54%, a 3.2% decrease from the 60.7% 2010 funded status. This continues the declining trend for the Cook County Pension Fund over the last decade which has seen a funded status decrease from 90% in 2000 to its present level of 57.54%.
The decrease in funded status is largely due to a low investment return rate
of 1.2%. The Cook County Pension Fund assumes that the fund will receive an investment return rate of 7.5%. "Without meaningful pension reforms the Cook County Pension fund will not be able to promise a secure retirement for employees and a sustainable system for taxpayers," said Bridget
Gainer, Cook County Commissioner (D-10), chair of the County Subcommittee on Pensions, "Every year that goes by that we do not address the growing unfunded liabilities the more draconian solutions will be needed to find sustainable solutions."
Commissioner Gainer recently launched www.OpenPensions.org, an open data pension website for the Cook County Pension Fund as a call to action for retirees, taxpayers and current employees to participate in the pension reform discussion. "In order to find a solution to our pension problem we have to change the way we have the conversation. Workers who rely on a pension from the County should be fully informed and actively involved in the discussions about any changes that will affect their retirement," said Gainer. "The path forward must begin by defining a sustainable level retirement security. It is critical that all stakeholders define the level of benefit required to provide a sustainable retirement and restore pension solvency."
President Preckwinkle created Cook County's first committee dedicated to pension and has partnered with Chairman Gainer and the Cook County Board to advance pension reforms at the County level. "The downward trend of our funding ratio is a stark indication of the urgent need for pension reform at the State level. We owe it to the employees who have paid into the system and the taxpayers who are frustrated with the status quo to make comprehensive changes that will make the system sustainable. I urge the members of the General Assembly to move swiftly to enact responsible legislation," said Cook County Board President Toni Preckwinkle.
"There is not a one-size fits all solution for pension reform in
Illinois. Each fund will need to devise local solution. There are no
shortcuts or quick fixes that can trump collaboration, hard work and the tough decisions that it takes to overcome a problem that has been this long in the making" said Gainer. Without any reform to the Cook County pension system the fund is expected to become insolvent by 2038, jeopardizing the retirements of thousands of county
workers and potentially leaving taxpayers on the hook for a huge bailout.
"CHICAGO - Governor Pat Quinn today announced a bold plan that secures public workers' retirement while fixing the state's pension problem that has been created over decades of fiscal mismanagement. The proposal is expected to save taxpayers $65 to $85 billion based on current actuarial assumptions. The changes will lead to greater certainty in Illinois' business climate, respond to concerns from ratings' agencies regarding the state's unfunded pension liability and support the continuation of the state's capital plan that is putting hundreds of thousands of Illinois residents back to work. The Governor's proposal follows weeks of discussion by the Governor's pension working group."
As the Chair of the Pension Sub-Committee, I convened a meeting on June 29th 2011 to discuss the current financial status of the Cook County Pension Fund. The Committee heard testimony from elected officials in Springfield, civic organizations, pension fund members, finance professionals and labor unions.
Presentation: A general overview of the June 29, 2011 meeting.