\n\t\t\t\tThe governor signed a sweetener for city police and firefighters that\u2019s estimated to add over $11 billion in accrued liabilities by 2055.
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UPDATE, Aug. 14: Mayor Brandon Johnson told investors Aug. 13<\/a> that the city would this year make the second half of a City Council-mandated $260 million supplemental pension payment.<\/p>\n PREVIOUSLY:<\/p>\n Gov. J.B. Pritzker\u2019s decision to sweeten pensions for Chicago police officers and firefighters added $300 million last year to the city\u2019s liabilities in its woefully underfunded pension systems.<\/p>\n Even though investment returns in 2025 were $337 million higher than predicted and the city made $272 million in supplemental pension contributions, Chicago\u2019s pension debt declined by only $106 million.<\/p>\n While inching in the right direction, the minor decrease in debt last year is overshadowed by the over $16.5 billion in debt added since 2014, the year before the city changed the pension funding formula.<\/p>\n The figures are in Chicago\u2019s 2025 Annual Comprehensive Financial Report<\/a>, which shows that the city has more than $50 billion in pension liabilities \u2014 the current value of pension benefits it has promised to workers \u2014 and only $14 billion in assets on hand to pay those benefits.<\/p>\n The slow progress on pension debt is because of Pritzker\u2019s decision to sign legislation<\/a> boosting benefits for Chicago police and firefighters, the two worst-funded of the city\u2019s four systems. The benefit sweetener will add an estimated $11.1 billion<\/a> in accrued liabilities by 2055.<\/p>\n And the future of supplemental payments to the pension systems is uncertain after Mayor Brandon Johnson hasn\u2019t followed through on the City Council\u2019s mandate to make a $260 million advance payment this year. His administration made half the payment this January, but the second installment remains unpaid, with the city citing delayed property tax revenue<\/a> from Cook County.<\/p>\n Also, even with high investment returns and supplemental payments, total additions to the systems last year fell 14.8% short of the actuarially recommended amount. That\u2019s a nearly half a billion-dollar deficiency.<\/p>\n<\/p>\n This failure makes the city budget unbalanced and means the amount Chicago needs to contribute annually to reach the state-mandated 90% funding level by 2058 will likely increase.<\/p>\n To put the 90% figure in perspective, the combined funding ratio of all four city systems is 28.1%.<\/p>\n Experts say funding ratios under 60% are unhealthy, with such systems defined as \u201cdeeply troubled.\u201d Funded ratios below 40% are considered past the point of no return and on the way to insolvency, major benefit cuts or massive tax hikes.<\/p>\n<\/p>\n All four of Chicago\u2019s pension systems are under 60%. The best-funded is laborers, at 44.1%. The remaining three are below 30%.<\/p>\n By making the second installment of this year\u2019s required supplemental pension payment, Johnson would show fiscal responsibility for the city.<\/p>\n Related articles:<\/p>\n","protected":false},"excerpt":{"rendered":"
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