Three of Chicago’s pension funds released fiscal year 2024 investment reports, each posting positive returns for the year ended Dec. 31, although two fell short of their benchmarks.
The $4.1 billion Chicago Municipal Employees’ Annuity & Benefit Fund returned a net 9.6% for the year ended Dec. 31 (just short of its policy benchmark return of 9.7%), the $1.3 billion Chicago Firemen’s Annuity & Benefit Fund returned a net 9.2% (well short of its policy benchmark return of 10.4%), and the $1.1 billion Chicago Laborers’ Annuity & Benefit Fund returned a net 8.5% (equal to its policy benchmark return).
For the three, five and 10 years ended Dec. 31, the municipal employees fund returned an annualized net 2.5%, 6.2% and 6.5%, respectively, compared with their respective benchmarks of 2.2%, 6.2% and 6.5%; and the firefighters pension fund returned an annualized net 2.4%, 6.7% and 7.3%, respectively, compared with their respective benchmarks of 3%, 7.3% and 7.2%. The laborers pension fund’s investment report did not provide annualized return data for those periods.
For the fiscal year ended Dec. 31, 2023, the municipal employees, firefighters and laborers pension funds had returned a net 10.9%, 14.5% and 9.7%, respectively.
The slightly lower returns for the latest fiscal year reflected slightly lower index returns for equities and bonds, although the returns were still impressive. For the year ended Dec. 31, the Russell 3000 index and Bloomberg U.S. Aggregate Bond index returned 23.8% and 1.3%, respectively, compared with respective returns of 26% and 5.5% the previous year.
The strong investment returns for 2024 provides good news for three of the worst-funded public pension funds in the nation. As of Dec. 31, 2023, the municipal employees, firefighters and laborers pension funds had funding ratios of 24.3%, 22.8% and 44.5%, respectively, according to their most recent actuarial valuation reports.
