This article reviews the FY2015 Budget Announcement from Chicago Mayor Rahm Emanuel. The spending plan is built on the assumption that the Illinois General Assembly will enact pension reform for the City’s police and fire pension funds before the City’s required annual pension contribution increases by $550 million in 2016. The Civic Federation said the City needs an alternate plan for addressing the underfunded pension systems.
This article discusses Mayor Rahm Emanuel’s FY2015 Budget announcement for the City of Chicago on October 15. The Civic Federation said the budget is fairly conservative in addressing the city’s $297 million deficit, but lacks a detailed, long-term plan for addressing the City’s underfunded police and fire pension systems.
This article covers the Civic Federation’s annual Status of Local Pensions report that looks at the funding levels of ten Chicago-area public pension funds. The funds continued to decline, showing an aggregate actuarial funding level of 45.5% in FY2012 down from 74.5% in FY2003. The Civic Federation said this pension funding crisis is the result of decades of oversight, and even with recent reforms it could be many years before the funds are fully stabilized.
This article covers the Civic Federation’s Status of Local Pensions report that annually examines the most recent audited data available for ten Chicago-area public pension funds. For all pension funds supported by the taxes of Chicago residents, including statewide funds, the unfunded liability per capita for each Chicago resident in FY2012 was $19,579.
Chicago-area public employee pension funding levels continued to decline in FY2012, with total unfunded liabilities for the ten funds analyzed rising to $37.2 billion from $32.0 billion in FY2011. On average, the ten funds analyzed had an actuarial funding level of 45.5% in FY2012, down from 74.5% in FY2003. For all pension funds supported by the taxes of Chicago residents, including statewide finds, the total unfunded liabilities reached $19,579 per Chicago resident in FY2012. The…
A Civic Federation report released today examines the continued funding decline of Chicago-area public employee pension funds. For all pension funds supported by the taxes of Chicago residents, including statewide funds, total unfunded liabilities reached $131.9 billion in fiscal year 2012, the most recent audited data available for all the funds. This equates to a pension liability of $19,579 per Chicago resident. The report also summarizes recent pension reform legislation enacted by the…
The declining health of public employee pension funds throughout the State of Illinois is primarily due to two causes: inadequate employer contributions over a sustained period and recent investment losses. This blog will discuss the role of investment rate of return in public employee pension funding and provide an update on the investment returns of Chicago-area pension funds in FY2012, the most recent year for which data are available. A pension fund invests the contributions of employers…
The most basic question about a pension fund is whether its assets are sufficient to cover total liabilities incurred. In this blog post, we examine the aggregate pension liabilities and Other Post Employment Benefit (OPEB) liabilities of ten large local government pension funds in the Chicago area and their collective assets.[1] Liabilities are calculated using actuarial assumptions about the value of all future pension payments for both current and retired employees, as well as any…
Information included in recent bond disclosures by the State of Illinois indicate that the pension obligation bonds (POBs) sold in 2003 primarily to boost the retirement systems’ assets have earned the minimum investment returns needed to break even in only seven of the last ten years. The $10 billion pension bond issuance will cost the State a total of $11.9 billion in interest repaid through FY2033. This amounts to a total interest cost of 5.05%. According to the bond document, any…
The difference between a pension fund’s assets and accrued liabilities is known as the unfunded liability. The unfunded actuarial accrued liability (UAAL) is calculated by subtracting the actuarial value of the assets from the actuarial accrued liability (AAL) of each fund. One of the functions of this indicator is to measure a fund’s ability to bring assets in line with liabilities. Healthy funds are ones that are able to reduce their unfunded liabilities over time while substantial and…
