A series of proposals has been made to modify the way future payments are made to the Chicago Public School Teachers’ Pension & Retirement Fund.
The proposals, made by Chicago Public Schools officials at Wednesday’s pension fund board meeting, came shortly after CPS made its mandated $634 million contribution to the pension fund for fiscal year 2015.
The cash-strapped school district proposed extending the bulk of its fiscal year 2016 payment to fiscal year 2017. Chicago Public Schools would pay $180 million of its required $676 million contribution in fiscal year 2016, with the remaining $496 million paid in the next fiscal year, along with the required payment for that year. That would bring the total 2017 contribution to about $1.19 billion, documents provided by CPS show. The school district would also pay 7.75% interest on the extended payment, a total of $9.6 million.
And to provide stability to the pension fund, CPS would make payments monthly rather than annually beginning in January 2016 and continuing for the next 10 years.
The pension fund board will form a subcommittee to study the issue further and make a recommendation to the full board later this month, said an announcement on CTPF’s website.
“We were encouraged to see representatives of CPS at our meeting this morning and appreciate the opportunity to openly discuss payment security for the gund,” CTPF Board of Trustees President Jay C. Rehak said in a statement on the website. “While we still have concerns about this proposal, we look forward to working through these issues so that our members' interests are protected and our fund receives all the revenue necessary to meet the pension commitments made by CPS.”
At a news conference Wednesday, Chicago Mayor Rahm Emanuel unveiled additional plans for funding the teachers’ pension fund.
One option Mr. Emanuel touted was merging the Chicago teachers fund with the $50 billion Illinois Teachers' Retirement System, Springfield. Another option would be to have the state cover the school district’s “normal costs” for pensions (the contribution required to cover active teachers) and for Chicago teachers to make the full 9% employee contribution, most of which the school district now covers.
“For too long there has been an inequity of pension funding where Chicagoans are forced to pick up the cost of our teachers pensions while the state handles pension payments across the rest of Illinois,” Mr. Emanuel said Wednesday.
In 2015, the state contributed more than $3.4 billion to Illinois TRS and $62 million to CTPF, school district documents show.