Please read this article by Fran Spielman. Looks like Daley has mismanaged the City of Chicago so long, he wants to cut pensions. Working for the public sector is not all fun and games. The problem is Daley's friends working a short amount of time and getting a large pension. Daley has not stopped the practice of people receiving multiple pensions. Mark my words, Daley has a pal or family member that will pop up after the 401 pension is awarded. Millions more for Daley friends and family machine hacks. Daley packed the Unions with his goons and now wants to fill the White House with one of his boys. Who was that goon on Daley's Pension Board with mob ties? Patrick McDonough
Future city workers could lose out on lush pension plan
REFORM | Panel may urge shift to 401(k) to solve cash crisis
June 22, 2008Recommend (10)
BY FRAN SPIELMAN City Hall Reporterfirstname.lastname@example.org
The lavish pensions that City Hall has been known for may become a thing of the past for new city employees.
Newly hired employees would shift to the 401(k) plans favored by private industry -- instead of the "defined benefits" enjoyed by their older co-workers -- under a plan being pushed by the head of Mayor Daley's pension reform commission.
Sources said the two-tiered pension system is the painful solution favored by Chicago's former chief financial officer Dana Levenson.
Levenson agreed to co-chair the 32-member pension commission to solve a crisis that threatens to strangle future generations of property taxpayers. The city's four pension funds alone have $10 billion in unfunded liabilities to employees and retirees. If they run out of money, Chicago taxpayers get stuck with the tab.
"I am not going to comment on anything about what we're doing," said Levenson, head of North American Infrastructure for the Royal Bank of Scotland.
Chicago Federation of Labor President Dennis Gannon and Fraternal Order of Police President Mark Donahue were equally reluctant to talk about reforms, for fear of violating a confidentiality agreement signed by commission members.
But when the Chicago Sun-Times confronted them about Levenson's idea, they could not remain silent.
"We knew before this commission was even formed that there was a potential desire to have a two-tier pension system for city employees," Donahue said.
"Unions have consistently been against such a plan. It establishes different benefits and creates different classes within your membership."
Gannon agreed that a two-tiered system would make it "very difficult to represent people. ... An employee is an employee -- whether you have 20 years, five years or no years."
Noting that it would cost the city $400 million more each year "to maintain the status quo" of pension benefits, Gannon said he's at least open to the possibility of following the CTA's lead -- by raising the age for new employees to become eligible for a full pension and increasing their pension contributions.
City pensions generally allow employees with at least 34 years of service to retire when they turn 55 at 75 percent of their highest salary. Those kinds of benefits are unheard of in the private sector, which has made the shift to 401(k) plans. City employees do not get Social Security.
"We have to look at where there may be possible savings for the city. If labor can be helpful, we want to address some of those savings," Gannon said, noting that state lawmakers will have the final say.
If union leaders agree to make sacrifices, half of the net proceeds from privatizing Midway Airport could be pumped into the pension funds, under legislation approved by the General Assembly.