A writer must “know and have an ever-present consciousness that this world is a world of fools and rogues… tormented with envy, consumed with vanity; selfish, false, cruel, cursed with illusions… He should free himself of all doctrines, theories, etiquettes, politics…” —Ambrose Bierce (1842-1914?). “The nobility of the writer's occupation lies in resisting oppression, thus in accepting isolation” —Albert Camus (1913-1960). “What are you gonna do” —Bertha Brown (1895-1987).
Does this sound familiar? Chicago Teachers' Pension Fund Was Chronically Underfunded
Chicago Teachers' Pension Fund cites Center for Tax and Budget
Accountability (CTBA) report on Chronic Underfunding
“The Chicago Teachers' Pension Fund, which manages
a $9.5 billion pension fund serving around 59,000 active and
retired educators and provides pension and health insurance benefits to
more than 25,000 beneficiaries, cited CTBA's recent analysis of
the proposed FY2014 Chicago public schools budget in a press release this
morning that might interest you. Here is what they had to say:
Supports Conclusion of Bipartisan Think Tank CTBA: Tax Levy Diversion of
1990s, Chronic Underfunding of 2000s Created CTPF Financial Difficulty
Sept. 3, 2013 /PRNewswire/ -- The financial challenges facing the
Chicago Teachers' Pension Fund can be attributed to nearly 20 years of
short-sighted decisions involving diverted tax levies and General Assembly- approved skipped or
reduced contributions by Chicago Public Schools -- not from benefits
now paid to retired teachers or promised to future ones.
one conclusion of a report issued late last week by the Center for Tax and
Budget Accountability, a nonprofit, independent research and advocacy think
tank committed to ensuring that tax, spending and economic policies are
fair. Founded in 2000, the organization is known for its objective analysis
of budget-related issues to improve the fiscal health of the State of
Illinois. Its bipartisan board of directors includes a mix of
institutional money managers, academics, union representatives and business
its August report, ‘Analysis of Proposed FY2014 Chicago Public Schools
Budget,’ CTBA noted that CPS made reduced payments or skipped payments to
CTPF which resulted in chronic underfunding during the past two decades.
CTBA report concluded that had CPS not diverted the property tax revenue
that - prior
to 1995 - went directly to CTPF, the pension plan would have been nearly 80
percent funded in fiscal year 2011.
said that while the plan was 96 percent funded in 2002, years of neglect by
CPS and the General Assembly had left it only about 60 percent funded in
2011. The plan was 53.9 percent funded at the end of its 2012 fiscal
CPS blames the lack of pension reform in Springfield as the cause of its
budget woes, the report said that the district has been well aware of the
impending increases in pension payments. Further, CTBA said that, while
it's the responsibility of the employer to pay the annual interest cost of
the unfunded liability, CPS' only action has been an attempt to extend its
pension holiday for two more years - a move that would have further eroded
CTPF's funding status.
also questioned CPS claims that the General Assembly's failure to enact
pension reform puts the Chicago school district in tough financial
straits. None of the major bills under consideration would have
altered CPS pension obligation, the report noted.
pleased to see a bipartisan group such as the CTBA study and report the
real issues that led to our plan's financial condition,’ said CTPF Board
President Jay Rehak. ‘That CTBA concluded our financial challenges
relate to chronic underfunding comes as no surprise to us.
the Board of Education convinced Illinois lawmakers to divert the fund's
dedicated revenue into the CPS operating budget in 1995, the underfunding
began - and today it continues. Today, CPS owes the plan $8 billion
plus $640 million per year in interest alone - the painful result of years