Why Firefighter Pensions are the New Great Chicago Fire

Here’s an excerpt from a recent Reboot Illinois guest view regarding the financial condition of Chicago firefighter pensions and the three key things to pay attention to in an upcoming report:

How much water do we need, and where is it going to come from?

Chicago firefighter compensation has long included salaries as well as pension promises, like the compensation for many other public employees. The pension plan promises future payments based on time of service. As firefighters fight on, their plan accumulates promises to pay them more money. For the plan to be financially stable, the fund must accumulate assets sufficient to cover the present value of future required payments.

But that is not what has happened in Chicago. Contributions to the plan have been far below the amount required keep the plan fully funded. They’ve used a squirt gun, not a fire hose. And now, under current law, the fund supporting firefighter pensions is going to require massively higher contributions.

A firefighter’s first job when arriving on the scene is to carefully assess the situation. Chicago-area citizens will get a similar opportunity in a couple weeks, when the new “actuarial valuation report” for the firefighter pension fund arrives. This article aims to help citizens prepare to read that report.

To read the rest of this article, go to Reboot Illinois.

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