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
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
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
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
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.