The City of Chicago will earmark $242 million in the form of an advance pension payment to the city’s four pension funds in an effort to head off the growth of unfunded liabilities.
According to a news release from the office of Mayor Lori Lightfoot, the move is part of a new pension funding policy to prevent unfunded pension liabilities from growing. The news release noted that the payment honors commitments made to police, fire, labor and municipal workers.
“Financial stability is the bedrock for economic growth and continued investments in the city,” Lightfoot said in the press release. “This payment demonstrates our ongoing commitment to ensuring a prosperous Chicago as well as fulfilling our promises to secure the retirements of police officers, fire fighters and city employees that provide essential services to keep our city safe and growing.”
According to the mayor's office, the move also received support from the Civic Foundation, a nonpartisan independent group that conducts government analysis and research. In its review of the city’s 2023 spending plan, it noted that it “strongly supports the mayor’s supplemental pension payments as a responsible use of higher-than-expected revenues and the commitment to making higher pension contributions in the future.”
City Treasurer Melissa Conyears-Ervin lauded Lightfoot’s move to pay down the pension debt in the news release.
“This will significantly reduce future pension costs, help safeguard the city from market volatility and make it less expensive for the city to borrow money,” she said in the release. “The net result will be to strengthen Chicago today and for the long term.”
Moreover, Daniel Fortuna, president of the Firemen’s Annuity and Benefit Fund of Chicago, offered his plaudits in the news release.
“On behalf of the firefighters and paramedics, active and retired, that make up our membership, we want to thank the mayor for addressing the funding challenges facing the Firemen’s Fund,” Fortuna said in the news release. “The city’s efforts in advancing meaningful solutions to the funding level is truly appreciated. We look forward to working with the city to secure supplemental employer contributions on a recurring basis.”