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Chicago Pension Fund Crisis Explained

The article discusses how Chicago's teacher pension fund is rapidly decreasing in assets as it pays out more in benefits each year than it receives in contributions. The fund currently has only $10 billion in assets but pays out $1 billion annually in benefits. Experts believe the pension fund will collapse without immediate changes, as Chicago has skipped pension contributions for several years and spent all reserve money. Fixing the problem will be difficult for Chicago as borrowing money will be costly due to declining credit.

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Gagandeep Singh
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25 views1 page

Chicago Pension Fund Crisis Explained

The article discusses how Chicago's teacher pension fund is rapidly decreasing in assets as it pays out more in benefits each year than it receives in contributions. The fund currently has only $10 billion in assets but pays out $1 billion annually in benefits. Experts believe the pension fund will collapse without immediate changes, as Chicago has skipped pension contributions for several years and spent all reserve money. Fixing the problem will be difficult for Chicago as borrowing money will be costly due to declining credit.

Uploaded by

Gagandeep Singh
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd

Gagandeep Singh Ms.

Mirecki 11R

9/20/12 Period 8

Article

In the article "Next School Crisis: Pension Fund is Running Dry", by Nathan Weber explains to the reader how the pension fund disintegrating and how that may begin a crisis for Chicago. The pension fund for teachers in Chicago is decreasing dramatically as time progresses. Experts believe that the collapse of the pension fund is forthcoming unless stopped with immediate change. The fund currently only has about ten billion in assets currently but is handing out about one billion in benefits a year. Chicago has also skipped its pension contributions for several years now. Also the school district has spent all the money in their reserve. Chicago is not left with many options to fix this with borrowing money being difficult and costly due to the decline of credit this coming summer. Nathan Weber wrote this article in an unbiased fashion. He addresses all the problems within Chicago and their inability to save money in order to support the school district and their pension plan. He also states how difficult it may be to recover from the debt they may encounter in the upcoming years and how preventing it is a hard obstacle. He also conveys the various pressures the Chicago school system may feel after reducing their contributions In the recent years.

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