\n\t\t\t\tDespite a 2021 law meant to improve the funding ratio of Chicago\u2019s park pension, the amount of money the system has on hand to pay out benefits remains low.
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Chicago\u2019s park workers\u2019 pension fund ended 2024 with only about 33 cents<\/a> on hand for every dollar it owes, highlighting how \u201cfixes\u201d will be slow to restore financial security.<\/p>\n The Park Employees\u2019 and Retirement Board Employees\u2019 Annuity and Benefit Fund reported an actuarial accrued liability of $1.31 billion<\/a> as of Dec. 31, 2024. Of that, $872 million remains unfunded, leaving the system just 33.25% funded.<\/p>\n In plain terms, for every dollar owed, the fund has only about 33 cents on hand. That\u2019s a slight decrease from the previous year\u2019s funding ratio of 33.34%. Pension experts say anything below 40% funding<\/a> is likely beyond hope.<\/p>\n While an improvement from its 28.74%<\/a> low in 2020, the system is down more than 10 percentage points from where it stood a decade ago. In 2020, the fund was projected to reach insolvency by 2028<\/a>. Luckily those projections inspired action.<\/p>\n In 2021, Gov. J.B. Pritzker signed Public Act 102-0263<\/a>, which changed the Park District\u2019s funding schedule and created a Tier 3. New hires after 2022 fall under Tier 3, which requires workers to pay 11%<\/a> in contributions rather than the 9% mandated for previously hired workers.<\/p>\n Tier 3 allows them to retire slightly earlier than Tier 2 members \u2013 those hired between 2011 and 2021. Tier 2 members can choose to opt into Tier 3.<\/p>\n The law aims for full funding of the pension by 2057 and allowed the district to issue up to $250 million in pension obligation bonds, which the fund has not executed. It also implemented a new funding ramp<\/a> to replace the flawed formula that had only required the district to pay 1.1 times what employee contributions had been two years prior, far below \u2013 sometimes only half<\/a> \u2013 what actuaries said was needed. For example, in 2017 the actuarial determined contribution was $45 million, but the payment made was only $20 million<\/a>.<\/p>\n Still, the 2024 numbers demonstrate how hard it can be to dig a pension system out of insolvency once the ratio reaches too low a point. At the end of 2024, the fund reported $16.7 million<\/a> in unrecognized losses, which means the unfunded liability increased because investment returns fell short. This has been a chronic<\/a> issue for the fund over the past 10 years.<\/p>\n Additionally, despite the changes made to Tier 2 and Tier 3 pensions to try to control costs, Tier 1 pensioners still working can continue to gain unsustainable retirement funds and those retired will continue to get their paychecks compounded by 3%<\/a> each year.<\/p>\n State legislators have been trying to enact legislation that will spike<\/a> benefits back to Tier 1 levels, arguing<\/a> benefits are not as good as Social Security. That\u2019s not true for the 2,097 Chicago parks retirees who received an average monthly benefit of $2,840<\/a>. That equates to $34,080 per year, low compared to the high-paying police, fire, or municipal pensions in Chicago, but still $10,000 a year more than the average person receiving Social Security at $22,344<\/a> per year.<\/p>\n