SO ON BUDGET DAY, THOUGHT IT WAS A GOOD TIME TO TALK ABOUT PENSIONS.

MORE SPECIFICALLY THE CITY'S PENSION PROBLEM.

YOU MAY HAVE HEARD THAT PHRASE, BUT DO YOU UNDERSTAND WHAT IT MEANS?

WHAT IS THE PROBLEM?

HOW MUCH DOES THE AND HOW DID WE GET INTO THIS MESS IN THE FIRST PLACE?

IN THE LATEST EDITION OF OUR EMMY AWARD-WINNING SERIES W T TW NEWS EXPLAINS.

I MEAN, DIVINITY TAKES A LOOK.

>> YOU MAY HAVE CHICAGO HAS A PENSION PROBLEM TO THE TUNE OF MORE THAN 35 BILLION DOLLARS OF DEBT.

THAT'S MONEY MEANT FOR CITY EMPLOYEES DOWN THE LINE.

WHEN THEY REACH RETIREMENT, THE CITY'S PENSIONS ARE UNDERFUNDED.

SO THE FEAR IS THAT THOSE RETIREMENT BENEFITS WON'T BE THERE WHEN WORKERS RETIRE, PENSIONS AFFECTS NEARLY EVERYONE.

EVEN IF YOU'RE NOT A PUBLIC EMPLOYEE, TAXPAYERS HAVE ALREADY FOOTING THE BILL TO ALLEVIATE THE TENSION CITIES ARE RATED ON THEIR FISCAL STABILITY AND CREDIT RATINGS.

AGENCIES FROWN AND PENSION UNDERFUNDING.

IF THEY CUT THE CITY'S RATING BECOMES MORE DIFFICULT AND EXPENSIVE FOR CHICAGO TO BORROW MONEY.

THAT EXTRA COST EITHER GETS PUT ON RESIDENTS OFTEN THROUGH HIGHER TAXES OR MEANS LESS MONEY FOR OTHER CITY PROGRAMS LIKE SCHOOLS, PUBLIC SAFETY FILLING POTHOLES.

HOW DID IT GET TO THIS POINT?

FIRST, YOU NEED TO KNOW HOW PENSIONS THEY START OUT LIKE MOST OTHER RETIREMENT PLANS.

A CERTAIN AMOUNT JUST TAKEN OUT OF A WORKER'S PAYCHECK.

THAT MONEY GETS INVESTED IN AN EFFORT TO GROW IT.

>> BUT THE PENSION IS A DEFINED BENEFIT PLAN WHICH WORKERS ARE GUARANTEED A CERTAIN AMOUNT UPON RETIREMENT.

REGARDLESS OF HOW THE INVESTMENT PERFORMS.

THAT'S WHAT CHICAGO NEEDS TO CONTRIBUTE TO ITS CORE PENSION FUNDS.

IF THERE ISN'T ENOUGH TO PAY WHAT EVERYONE IS OWED, THE CITY IS ON THE HOOK TO PAY THE DEFINED BENEFITS RIGHT NOW.

REMEMBER, THE FUNDS ARE COLLECTIVELY 35 BILLION DOLLARS SHORT.

SO WHY ARE THE CITY'S PENSION SO SEVERELY UNDERFUNDED?

SOME CLAIM THE PENSION BENEFITS NEGOTIATED BETWEEN UNION CITY AND STATE ARE OVERLY GENEROUS AND TOO DIFFICULT TO KEEP UP WITH >> ALSO FOR A LONG TIME, THE CITY JUST FLAT OUT DIDN'T CONTRIBUTE ENOUGH TO THE PENSION FUNDS.

CHICAGO WAS FOLLOWING STATE LAW WHICH DIDN'T REQUIRE THE CITY TO PUT IN IT'S ALSO A MATTER OF MASK FOLLOWING THE LAW.

STILL IN THAT THE PENSIONS WITH LOADS OF NOW A NEW LAWS IN PLACE.

ILLINOIS REQUIRES THE CITY GET ITS PENSIONS.

90% FUNDED WITHIN THE NEXT 30 OR SO YEARS IN AN EFFORT TO CATCH UP THE CITY APPROVED A NEW CASINO.

ITS TAX REVENUE WILL GO EXCLUSIVELY TOWARD PENSION WILL IT BE ENOUGH FIX THE PENSION FUNDING PROBLEM?

GO AHEAD YOUR TOO.

>> AND YOU CAN SEE MORE