Ward Room
Covering Chicago's nine political influencers

Opinion: Daley Discredits Pension System

View Comments (
)
|
Email
|
Print
Opinion: Daley Discredits Pension System

advertisement

Do you know who should be angry about the Chicago Tribune stories describing how former Mayor Richard M. Daley and his City Council weaseled their way to receiving pensions that far exceed their contributions?

Teachers, nurses, librarians, police officers, firefighters and street sweepers. Not because politicians are receiving more money, but because the way they rewrote the laws to enrich themselves discredits the entire public pension system.

According to the Tribune, Daley took advantage of several obscure laws to receive a legislative pension based on his $216,210 salary as mayor, while making payments to the General Assembly Retirement System based on his $17,500 starting salary as a state senator.

The $183,778 in public pension benefits that Daley now receives is divided up between GARS and the municipal pension fund. Under the state's convoluted reciprocal system, the GARS plan pays the former mayor $117,629 a year, while the municipal pension plan pays him $66,149.

Yet Daley paid far more in pension contributions to the municipal pension plan than he did to the GARS plan.

After jumping back into the municipal plan from GARS in 1991, Daley contributed 8.5 percent of his pay, the base rate for city workers, for the remainder of his career. That worked out to about $307,000, including interest from investments. The city kicked in another $283,000 with investment returns.

Those amounts were enough to cover the benefits the plan is paying to Daley now. But the former mayor never contributed another penny to GARS, even though that fund pays him more than $117,000 a year.

Today, the GARS pension plan, which taxpayers all over the state pay into, has a funding level of just 21.2 percent and unfunded liabilities of $235 million. Because Daley's shortfall makes up part of that deficit, state taxpayers will end up footing the bill for the pension of Chicago’s longest-serving mayor.

One of the conservative movement’s biggest causes is eliminating pensions and benefits for public employees. They blame bloated public salaries for everything from the decline of Detroit to the insolvency of Illinois. Having destroyed the private-sector union movement, they’re now going after public-sector unions, telling ill-paid workers they should resent generous government benefits.

These unearned pension, distributed to the highest-profile public employees, will only give libertarians and free-market fundamentalists more ammunition in their campaign to starve government. There’s nothing we can do to reduce the mayor’s pension at this point, but we can -- and should -- create a system in which politicians receive the same benefits as their secretaries. Of course, only politicians can make that happen. Having created a system that benefits them, at the expense of their underlings, it’s a lot to expect them to change it. 

Buy this book! Ward Room blogger Edward McClelland's book, Young Mr. Obama: Chicago and the Making of a Black President, is available on Amazon. Young Mr. Obama includes reporting on President Obama's earliest days in the Windy City, covering how a presumptuous young man transformed himself into presidential material. Buy it now!

Related Topics Opinion, Richard Daley, Chicago, Pension
Leave Comments