Once they are certified and fully hired, our first responders have been promised the right to enjoy retirement benefits, including pensions. The State of Illinois knows from the experiences posted by other public-sector pension funds that pledges of this type are often challenging to keep. The State does not control the pension funds that contain money set aside for the Downstate peace officers and firefighters who work, or have worked, outside Chicago. However, with the ongoing consent of organizations that represent these police officers and firefighters, the General Assembly has monitored these funds since 2008. As part of this monitoring, the CGFA publishes an annual report on the financial conditions of these pension funds.Any monitoring of a pension fund is going to zero in on what level of benefits has been promised to vested beneficiaries that is not represented by cash actually deposited in the fund, plus anticipated earnings as the cash is invested or lent out. The difference between the promise and the cash-plus-earnings is called the “unfunded liability” of the fund. CGFA found that the Downstate first responder pension funds, as an aggregate group, were funded at a level that is between 59% and 60% of full funding during the most recent reporting period. For the Downstate firefighter funds, this number was 59.7%, and for the Downstate police funds, this number was 59.1%.
This number, of less than sixty cents on the dollar, is sub-optimal. It means that the suburban, exurban, and Downstate municipalities that are responsible for the upkeep of these pension funds are going to have to further increase their annual deposits into these funds. They are required, by law, to deposit enough moneys into these funds to move the funds towards full funding and enable fulfillment of the pension promises made to first responders. On the other hand, these non-Chicago police and fire pension funds are funded at a level that, although inadequate, is well above the dire conditions posted by the Chicago police and firefighter pension funds. As of the most recent reporting period, the Chicago police pension fund is funded at 22.8% of its projected liabilities and the Chicago firefighter pension fund has posted a 20.8% funded level. These numbers, which come from the Chicago-based Civic Federation, indicate that these two pension funds are barely funded at all in the sense of having cash inside them.
The city of Chicago now owes an actuarially estimated $35.4 billion in unfunded liabilities to all of its employees collectively (including, but not limited to, Chicago police officers and firefighters), a debt of more than $13,000 for each man, woman, and child now living in Chicago.