Case study: Addressing pension crisis

Case study: Addressing pension crisis

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Chicago public schools (CPS) are having a big problem in sustaining the continuity of academic activities in all public schools. Both teacher’s union pensions and legacy costs are making CPS strain as it tries to cover the debts. Since the teachers are threatening to strike and the state authorities have refused to assist, CPS should try the following solutions. First, CPS should implement a sustainable pension system for newly hired teachers. That is, CPS should cut pension only for the newly hired and future teachers to avoid a strike from the old employees. Secondly, the CPS should tell teachers that the pension would not be available for some times and use the available money to invest. Then, CPS would assure teachers that they will receive dividends after the business grows.  This option would give CPS time to raise more money and avoid the strike, which would be caused by cutting pension.(410words)