If you are into horror movies and like to be scared, take a look at the actuarial valuation of Chicago’s Municipal Employees' Annuity and Benefit Fund (MEABF). Here are some frightening highlights:
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The actuaries warn, “The Fund is in imminent danger of insolvency. Without increased funding, the Fund is projected to become insolvent within the next 9 years (during 2025).”
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Only 19 cents is set aside for every dollar of promised benefits.
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To properly fund the MEABF, the city would have to set aside about $11.45 for every dollar of salary paid.
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To have enough money to pay all promised benefits, the city would have to lay off all of the municipal employees and put the amount of their annual salaries into the Fund for 11 years.
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The Fund’s actuaries said the minimum payment into the Fund in 2016 should have been $962 million. The city only put $150 million into the Fund.
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To increase funding to the MEABF, Mayor Rahm Emanuel has implemented a tax on every Chicago water and sewer bill. Once this tax is fully phased in, it will produce $239 million in revenues. Even if this is added to the $150 million currently put into the Fund, the city would still be paying only 40 percent of what the actuaries say should be paid in.
http://www.chicagotribune.com/news/local/politics/ct-rahm-emanuel-city-finances-met-0803-20160803-story.html
