Bad to Worse
These numbers are appalling:
- Chicago’s unfunded pension obligations have ballooned to $37.3 billion — a more than three-fold increase since 2003 — because of inadequate employer contributions, declining investment income and a shrinking base of active employees, a taxpayers’ watchdog group has concluded.
The Civic Federation’s latest report on the sorry state of the Chicago area’s 10 public employee pension funds does not factor in a Chicago pension reform bill signed by Gov. Pat Quinn that saved the Municipal Employees and Laborers pension funds.
But Civic Federation President Laurence Msall said the report nevertheless underscores the need for Mayor Rahm Emanuel and police and fire union leaders to forge an agreement on pension reforms and for the Illinois General Assembly to approve it during the fall veto session.
- Government employees did their part by contributing the required portion of their paychecks to their future pensions. But the government contribution fell nearly $2 billion short of the $2.8 billion required to cover costs and reduce a portion of unfunded liabilities over a 30-year time frame, the report concludes.
Investment income didn’t help. And the future outlook is bleak, thanks to a “declining ratio” of active employees to beneficiaries.
In 2012, the 10 funds had 1.11 active employees for every retiree, down from a 1.55 ratio a decade ago. The police, laborers, Metropolitan Water Reclamation District, Forest Preserve and CTA funds all had more beneficiaries than active employees in 2012.
Counting statewide funds, the pension liability amounts to $19,579 for every Chicago resident.