CHICAGO (Reuters) – Chicago will not immediately pursue the issuance of up to $10 billion of pension bonds to buoy its underfunded retirement system, under steps Mayor Rahm Emanuel will outline to the city council on Wednesday, a city hall source said on Tuesday.
Instead, Emanuel, who is not seeking a third term in office next year, will work with aldermen to create a structure for the debt, leaving it up to them and the next mayor to decide whether to issue the bonds, the source added.
Chicago - Pension - Liability - Ratio - Percent
Chicago’s unfunded pension liability was $27.6 billion in 2017 with a funded ratio of only 26.5 percent on an actuarial basis. The big pension burden, along with years of structural budget deficits, led to downgrades of Chicago’s general obligation credit ratings and higher borrowing costs.
Even after raising fees and taxes in recent years to save its four retirement funds from becoming insolvent, the third-largest U.S. city faces pension contributions that will grow to $2.13 billion in 2023 from $1.02 billion this year.
Excerpts - Emanuel - Address - Tuesday - Press
Excerpts from Emanuel’s address released on Tuesday by his press office call for amending the Illinois Constitution to eliminate an obligation to give retired workers...
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