Next School Crisis for Chicago: Pension Fund Is Running Dry

Source: NY Times

By MARY WILLIAMS WALSH

One of the most vexing problems for Chicago and its teachers went virtually unmentioned during the strike: The pension fund is about to hit a wall.

The Chicago Teachers’ Pension Fund has about $10 billion in assets, but is paying out more than $1 billion in benefits a year — much more than it has been taking in. That has forced it to sell investments, worth hundreds of millions of dollars a year, to pay retired teachers. Experts say the fund could collapse within a few years unless something is done.

“There’s a huge crisis,” said Laurence Msall, president of the Civic Federation, a nonpartisan research organization in Chicago that works on fiscal issues. “The problem does not get easier by waiting. The problem gets bigger, and starts to become an insurmountable obstacle.”

Teachers in Chicago, as in many cities, do not earn Social Security credit for their years in the classroom.

FULL story at link.


Read more: http://www.nytimes.com/2012/09/20/business/teachers-pension-a-big-issue-for-chicago.html?partner=EXCITE&ei=5043

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Fabrizio Costantini for The New York Times

Claire J. Murray retired in 2002 with a pension of about $42,000 a year, based on 34 years as a teacher and middle-school counselor.