Fifteen former Chicago aldermen are receiving annual pensions exceeding six figures, according to a new report by the Illinois Policy Institute (IPI).
The 15 former aldermen have accumulated an average of at least $768,500 gross total in pension benefits, the July 23 report said. Four have received payments exceeding $1 million.
The report is based on documents from the Municipal Employees’ Annuity and Benefit Fund of Chicago obtained through the Freedom of Information Act.
Former Chicago Alderman Thomas Allen
Former aldermen William Beavers, Burton Natarus, Dorothy Tillman and Bernard Hansen have all received more than $1 million, according to the report.
Some of those responsible for the city’s more than $36 billion pension crisis are the ones benefiting from it, Eddie Damstra, a reporter for IPI, reported.
In recent years, the government has turned to taxpayers to close the gaps in its pension system. Damstra cites the 2016 water-and-sewer tax instituted by Mayor Rahm Emanuel, and recent taxes on soda and sweet drinks.
Compounding the issue are the loopholes that many claim are responsible for the pension problem in the first place. Chicago aldermen have been receiving substantial retirement payouts since the ’90s, according to IPI.
In some cases, former elected officials are eligible to receive monthly retirement payouts of up to 80 percent of their last month’s salary on the job. Laws on the books also allow retired aldermen to earn maximum benefits after only 20 years of service.
These loopholes contrast greatly from that of traditional employees, who are required to be enrolled in the pension system at least 30 years to have similar opportunities.
Retired elected employees can also pad their payouts by reportedly purchasing pension credits at a discounted rate.
In their report, IPI singled out former Alderman Thomas Allen, who represented the 38th Ward, and reportedly served only 17 years but was able to buy credits for less than the value of retirement benefits he was set to receive.
The pension issues date back to a 1991 law introduced at the time allowing council members to effectively boost their pensions, according to the Chicago Tribune. It was reportedly signed into law by Gov. Jim Thompson on his last day in office.
One way to shore up Chicago’s pension crisis is by establishing a 401(k)-style retirement system for future employees, Damstra wrote. He cites the unpredictability of defined-benefit pensions to be at the heart of the city’s issues.
“While these loopholes have certainly driven the growth of the city’s pension liabilities,” Damstra wrote. “The precarious nature of defined-benefit pensions are the fundamental cause of their un-sustainability.”
Other former aldermen receiving more than $100,000 annually include William Banks, Ed Smith, Thomas Allen, Virginia Rugai, Eugene Schulter, Helen Shiller, Mary Ann Smith, Frank Olivo, Richard Mell, James Balcer and Regner Suarez.
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