Chicago Laborers' Annuity & Benefit Fund is projected to be 90% funded, from the current approximately 45%, by 2057, under an agreement announced Monday between city officials and the two unions representing pension fund participants.
The LABF has $1.35 billion in assets and, without some sort of action, had been expected to become insolvent in 2029.
Under the agreement, Chicago will contribute $40 million annually to the pension fund beginning in 2017, according to a fact sheet on the agreement from the city's office of management and budget. The city funding will come from revenue received from a 2014 increase in the city's emergency phone surcharge.
Also, union members hired after Jan. 1, 2017, will contribute 11.5% of pay to the pension fund, up from the current 8.5%, and cannot retire before age 65.
Current employees will have the option of deferring retirement to age 67 and making an 8.5% employee contribution, or retire at 65 with the 11.5% contribution.
An earlier agreement between the city and union members in the Chicago Laborers plan and the $4.6 billion Chicago Municipal Employees' Annuity & Benefit Fund was ruled unconstitutional March 24 by the Illinois Supreme Court after active and retired city workers argued the law violated the state's constitutional clause that pension benefits can't be reduced or impaired.
The municipal employees plan was not part of the agreement reached Monday.