Chicago’s pension debt climbed about $ 1.7 billion in 2019, according to the city’s audited annual financial report released Thursday.
In total, Chicago owes $ 31.79 billion to its four employee pension funds representing police, firefighters, city workers and laborers, according to the certified annual financial report 2019. This represents an increase of almost 5.6% from 2018, according to the report.
CFO Jennie Huang Bennett said the growth was “not surprising” as the city was not obligated in 2019 – the last full year of Mayor Rahm Emanuel’s tenure – to contribute to its base pension funds. actuarial estimates. This requirement, which came into effect in 2020, has helped close the city’s deficit.
This law is designed to force the city’s pensions to be funded at a 90% level by 2045, to ensure that the funds can pay benefits to retired employees.
The city made no significant progress towards this goal in 2019, with the level of funding for workers’ and firefighters’ pension funds increasing slightly and the level of funding for police and municipal workers’ funds stagnating from 2018, according to the report. The report.
The firefighters fund has the lowest funding level of the four funds at 17%, according to the report.
The labor-sponsored fund has the highest level of funding of the four funds at 43%, according to the report.
The city’s 2020 budget called for the city to contribute $ 1.68 billion to its four pension funds, according to city records.
The city ended the year with $ 185 million in cash, an increase of $ 23 million from the end of fiscal 2018, officials said. Additionally, the city ended 2019 with a $ 4 million surplus in its general fund, which it uses to pay for most city services, according to the report.
This allowed the city to add $ 10 million to its long-term reserves, said Huang Bennett.
The audit provides an overview of the city’s finances before the coronavirus pandemic struck, causing financial catastrophe and blowing up a $ 700 million hole in the city’s 2020 budget.
Huang Bennett told reporters on Thursday that the city’s finance team saw nothing to suggest the deficit has since widened. Mayor Lori Lightfoot detailed the gap on June 9.
The city’s budget forecast for 2020, released in August 2019, warned that the city’s annual budget deficit could reach $ 1.6 billion in 2021 if the economy fell into recession. Federal data shows a recession began in February as the pandemic sickened tens of thousands of Americans.
Contact Heather Cherone: @HeatherCherone | (773) 569-1863 | [email protected]