The Chicago City Council on Nov. 15 passed Mayor Brandon Johnson's 2024 budget, which includes contributions totaling $2.8 billion to its four woefully underfunded pension plans.
Those contributions, include $307 million in advance payments and represent the third year in a row — and third in the city's history — it has made actuarially determined contributions.
The budget, which has a $538 million shortfall, is the first for Johnson, who was elected in April.
In 2022, the city paid the actuarially determined contribution rate — amounting to $2.3 billion — for the first time in the city's history after passing an ordinance in 2017 that called for contributions to the pension funds to be increased every year until reaching actuarially determined contribution amounts in 2022.
Until 2016, the city of Chicago made statutory required contributions that fell below the contributions that actuaries have said were necessary to keep the pension plans' funding ratios from dropping.
The $307 million in advance payments are the result of the City Council approving in November 2022 a new policy of advancing future pension contributions. That action also resulted in credit rating upgrades for the city from Moody's Investors Service to Baa3 from Ba1.
Then-Mayor Lori Lightfoot announced the first advance payment of $242 million in January. The advance payment was included in the $2.6 billion in contributions the city scheduled for payment in 2023.
According to the pension fund's most recent actuarial valuations as of Dec. 31, the $984 million Chicago Firemen's Annuity & Benefit Fund was the worst funded at 20.8% on an actuarial basis, followed by the $3.7 billion Chicago Municipal Employees' Annuity & Benefit Fund at 22.8%, the $3 billion Chicago Policemen's Annuity & Benefit Fund at 23.8% and the $1 billion Chicago Laborers' Annuity & Benefit Fund at 44.5%.