Suburban pension funds deep in the hole

Suburban pension funds deep in the hole

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CHICAGO (FOX 32 News) -

It's not just Chicago.

Dozens of suburban public employee pension funds face financial chaos and some experts fear a few could soon end up in bankruptcy court.

Stone Park is one of Cook County's smallest villages, best known lately for permitting a strip club to open right next door to a convent of Roman Catholic nuns. Over the years, the FBI's marched a series of bribe-taking and drug-dealing local officials off to prison, including a mayor and two former chiefs of police.

Despite a state law that such corrupt officials should forfeit their pensions, FOX 32 News found last April that Stone Park's three ex-cons were still collecting more than $43,000 a year. One ex-police chief, Seymour Sapoznik who took bribes from the Mob, was actually on the pension board after getting out of federal prison. It's perhaps then not a surprise that Stone Park's police pension system is desperately underfunded. It had only enough cash to cover 7% of its debts and recently borrowed $2 million.

Experts say Stone Park's just one of 58 police and fire pension funds in suburban Cook that may soon seek help from the Illinois General Assembly or a federal bankruptcy court.

“Something like you've seen in Stockton, California, Detroit -- obviously a lot bigger. You know, a small Detroit, if you will, where they just can't afford the pension obligations without having their budgets just cut, you know, to absolutely nothing,” said Andrew Schroedter of the Better Government Association.

At risk are residents who face a threat of enormous tax increases, as well as suburban firefighters and police counting on pensions. Suburban Cook has 5,900 retired cops and firefighters now collecting, with 8,500 more eligible in future years.

There are 217 police and fire pension funds in suburban Cook. The BGA found 204 have less money on hand than they should. Very few suburbs have Stone Park's history of corruption. Most simply failed to fund their pension systems adequately and many have limited ability to raise the total $3.3 billion they need now.

“So, that makes it a little more dire. They just don't have the tools to get themselves out of this mess,” Schroedter added.

It's a mess that will confront the next governor. Democrat Pat Quinn and Republican Bruce Rauner, though, rarely discuss it.

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