October 22, 2014
The total unfunded liabilities for the State and local public employee pensions that Chicago residents fund reached $19,579 per capita for fiscal year 2012. That is up from $6,175 per capita in FY2003.
Like comparing unfunded liability to payroll, calculating the unfunded liability per capita offers a sense of scale for unfunded liabilities. The UAAL per capita for the four City of Chicago pension funds was $1,890 in FY2003. The total for all ten local pension funds (the others are the Metropolitan Water Reclamation District, Cook County, Forest Preserve District of Cook County, Chicago Public Schools and Chicago Park District funds) was $3,359 per resident of Chicago. Including the five State-sponsored pension funds for which Chicago residents also pay taxes (including income taxes), the FY2003 unfunded liability per capita in Chicago was $6,175.
The next table shows that by FY2012, the UAAL per capita for the four City of Chicago pension funds had grown to $7,281. This is nearly four times the amount of UAAL per capita for these same four pension funds in FY2003. The total for all ten local pension funds was $12,233 per resident of Chicago, and the grand total including statewide funds was $19,579. Among the local funds, the Municipal Fund had the highest unfunded liability per capita at $3,155, although the Fire, Police, Cook County and Chicago Teachers’ Funds also exceeded $1,000 per capita. The downstate Teachers’ Retirement System had the highest unfunded liability per capita at $4,045 in FY2012.
The total unfunded liabilities of all the five State funds and ten Chicago-area funds reached $131.9 billion in fiscal year 2012.[1] Unfunded liability is the amount owed for both current and future pensions that is not covered by assets (see the Civic Federation’s Status of Local Pensions report for a more technical definition).
The following graph illustrates the $84.9 billion increase in the ten local funds’ unfunded liabilities between FY2003 and FY2012, alongside the $13,405 increase in unfunded liabilities per capita.
[1] The 2012 fiscal year of the five state pension funds, Chicago Teachers’ fund, and Chicago Park District fund ended June 30, 2012. The 2012 fiscal year of all other funds ended December 31, 2012.