Santos Hits Daley Pension Fund Grab

Santos Hits Daley Pension Fund Grab

IPSN Newspaper, April 28, 1997

CHICAGO CITY TREASURER Miriam Santos blasted Mayor Daley’s proposal to divert Police, Fire, Laborers and Municipal Employees Pension Fund monies to pay for City expenses like new sidewalks, computers and interest payments on a variety of bond issues.

SPEAKING IN AN exclusive interview with Illinois Police and Sheriff’s News, Santos called the recent Daley Administration plan “a raid.”

‘THE BOTTOM line is that a raid is a raid,” she said, “and any raid is impermissible.”

Santos reported that although the City’s Laborers’ Pension Fund is currently funded at 110 percent of any anticipated obligations, the City Police Pension Fund is funded at a mere 60 percent of its current needs. And, if a State-sanctioned accounting system is used to determine the funding needs and obligations of the Police Pension Fund, rather than an accounting system the Daley Administration favors, the 60 percent funding level drops to a dangerous 51.6 percent of anticipated needs.

The City Fire Pension Fund is on even more shaky ground than the Police fund. The guaranteed amounts of money that the Fire Pension Fund needs is only 45.7 percent of the needs of firefighters who are now in retirement and those who will be coming off active duty in years to come.

Although Santos admits the City can use new sidewalks and new computer programs, “we don’t need to fund these programs on the backs of City employees,” Santos believes.

The City Treasurer says that the 42 separate unions that represent City employees should get together, familarize themselves with all the issues, then present a solid front to prevent Mayor Daley or any future administration from “grabbing” pension funds to pay for ordinary City expenses. “It’s a slippery slope,” Santos declared, whenever a city administration starts using pension funds to meet needs other than pensions.

THE CITY TREASURER challenges the Daley Administration’s entire approach to administering the four separate funds. Although the funds are all earning money at a healthier rate today than they were about five years ago, when Santos first raised the question about the funds’ stability, the fact is only the Laborers fund is completely in the black. Santos says the best estimate that the 60-percent funded Fire fund will remain viable is less than 20 years. In fact, she cites some actuarial estimates that see the Fire Fund as approaching bankruptcy as early as the year 2013, if no positive steps are taken before then.

Santos says she does not believe Mayor Daley is personally responsible for the current “raid” proposal, but “it’s somebody on his staff,” she thinks. “This whole thing was dropped on people without any analysis,” she says.

The original proposal to divert pension fund money for City needs was slipped into the news stream on a Friday afternoon two weeks ago. Just the timing of release of the plan suggests that it was not intended to attract wide attention.

Newspaper readership drops dramatically on Saturdays and by Sunday, the typical Friday story is regarded as old news, and therefore not given much play.

The net effect then is that a story that might be a bombshell on Monday or Tuesday is pretty much ignored on the weekend. Which is, of course what the Daley people were looking for in this latest pension grab attempt.

MIRIAM SANTOS points out that she did not learn of the sidewalks-and-computers plan until about an hour before the Daley Administration went public with the story, even though she is, by law, one of the Pension Fund Trustees.

“One of the things that has always concerned me,” she says, “is how poorly funded both the Police and Fire Pension funds are. What this proposal would do,” she concludes, “is take a risky situation and make it even more risky.