No Pension for You!

It's worse than anyone has even hinted at:

• Chicago's public pension funds are teetering on the brink of insolvency in large part because city officials and union leaders repeatedly exploited the system, draining away billions of dollars in the last decade to serve short-term political needs, a Tribune investigation has found.
  
  Time and again, the funds have been used as a bargaining chip or a piggy bank. Politicians trimmed budgets by offering early retirement incentives and greased union contract deals with increases in benefits. "Pension holidays" allowed the city to avoid paying into workers' retirement funds.
  
  
• It hasn't always been this way. The pensions were run successfully for decades and, just 10 years ago, were relatively well-funded. The teachers pension was close to 100 percent funded in 2000. Municipal workers had funding levels above 90 percent. City laborers had enough assets to cover 133 percent of their liabilities. The city's police pension, traditionally underfunded, hovered around 70 percent.
  
  By the end of this year, however, not one of the pensions' funding levels will be above 70 percent. The police and fire funds are already below 40, and the municipal fund is below 50. Pension experts say funding levels below 80 percent place the long-term viability of pensions in jeopardy and are nearly impossible to overcome without massive borrowing, painful tax increases, cuts to benefits and increased contributions.

Go read the entire article at this link here.

Then go read this one that went up after 2130 last night:

• ....a Tribune analysis of nearly 130 private equity and real estate investments made by four pension funds since 2000 found that nearly half have lost value so far. Of the $1.3 billion invested to date, the pension funds have seen just $60 million in added value on their balance sheets.
  
  Had the funds used an equal amount to buy and hold a 30-year U.S. Treasury bond offered in 2000, they would have received $893 million in interest payments to date — and their principal investments would be secure.
  
  
• Investment firms entrusted with the money, meanwhile, collected millions in fees despite failing to meet expectations.
  

This could almost be classified as criminal in nature. It certainly stinks to the rafters and we imagine the "Who's Who" of connected "investment firms" reads like a laundry list of connect politicos, their nephews and all sorts of political contributors.