Chicago Proposes 401(k) Accounts for Transit
Dennis Byrne
19 July 2007
One Comment
A groundbreaking effort to switch a public employee pension system from a defined benefit plan to a defined contribution plan is underway in Chicago.
The Chicago Transit Authority wants to follow a growing trend in the private sector toward a 401(k)-type retirement system in which the employer and employee make regular contributions into a retirement account controlled by the employee. Supporters say this approach can save taxpayers money while still providing solid retirement income for state workers.
A CTA spokeswoman said Chicago Mayor Richard M. Daley, the state’s most powerful Democrat, has signed on to the retirement restructuring.
Good to see the glacier moving! This deserves to be just the beginning of reforms. CTA pension plan has been the most generous in Illinois – better than the pensions for other unionized State of Illinois employees. And far beyond anything that a regular enterprise can possibly afford.
Last note – this proposal has not been implemented. It’s just a proposal. I hope the legislature keeps the pressure on CTA to keep going.
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