Commission on Government Forecasting and Accountability issues report on status of Illinois local government pensions

As with the State-managed pension funds overseen from Springfield, many local public-sector retirement funds are posting significant unfunded liabilities. “Unfunded liabilities” are defined by actuaries as balance sheets where the present value of the actuarial liabilities of the system – the cost of future pension payments that must be paid to persons vested in the system – exceed the present value of the actuarial assets of the system. Actuarial assets are the financial assets actually in hand, multiplied by a prudent estimate of future investment returns.

The CGFA report showed massive Illinois local public-sector actuarial liabilities in a wide variety of separate funds. The liabilities could bind future taxpayers in Chicago, Cook County, the (largely Cook County-based) Metropolitan Water Reclamation District, and municipalities throughout Illinois. CGFA’s actuarial study found that eight separate Illinois local governmental retirement funds were each posting net unfunded actuarial liabilities exceeding $1 billion.

The CGFA report was released on Monday, November 30. CGFA has posted its report, “November 2015: Financial Condition of Chicago, Cook County & IL Municipal Retirement Fund Systems” on its website here (http://cgfa.ilga.gov/home.aspx).