K-12 Tax & Spending Climate: Illinois legislature passes Chicago pension fund reform
The Illinois legislature has passed a plan to overhaul two of the funds in the Chicago pension system, by far the most underfunded of any large US city.
The move is an important first step toward shoring up the combined $27bn unfunded liability the city and its school district have racked up after years of the government failing to pay its share. The massive liability has caused the city to suffer multiple credit rating downgrades in recent years.
The bill now moves to the desk of Governor Pat Quinn, who has not indicated whether he will sign it into law.
The reform addresses the pension funds for municipal employees and labourers, which are 37.6 per cent and 56.3 per cent funded, respectively. The bill would increase the funding levels to 90 per cent by 2055 through benefit cuts and increases in employee contributions.
