Print Friendly, PDF & Email

By: Nancy Mathieson*

Among the many reasons Chicago’s police and fire pensions are grossly underfunded are inadequate long-term planning, legislated benefit increases, pension holidays and overall kicking-the-can-down-the-road. Another factor working against Chicago is the imbalance between active and retired public safety officers. The New York City police pension received some unwelcome attention recently because the number of retirees it supports exceeds the number of active police on the streets.

Little known fact: Chicago has the same upside-down relationship between its active and retired public safety departments.

Policemen’s Annuity and Benefit Fund reports for 2013 show participants in the pension plan include 12,161 active police versus 13,159 police retirees/survivors. In addition, a large portion of the active force is nearing or eligible for retirement, with 34% aged 45-54 and 25% having 20 or more years of service. Total retiree count increased by 1.8% in 2013, while total expenditures for retiree benefits increased by 4.56%.

In 2013, the number of active and retired/survivor firefighters was almost identical, 4,685 versus 4,642, according to Firemen’s Annuity and Benefit Fund reports. Expenditures for retiree benefits rose a full 8% during 2013, while the number receiving benefits rose only .6%.

The average age of active police and active firefighters is about the same, 43 years old for police versus 46 years old for firefighters.

Chicago’s 2014 police budget looked toward a $40 million hike from $1.25 billion to $1.29 billion, with no additional hiring. (The 2014 budget included $71 million for overtime compared to $32 million in 2013). With no additional actives and the number of retired police officers continuing to grow, this inverse relationship will continue.

The upside-down relationship between active participants and retirees/beneficiaries did not cause the pension underfunding problem and upside-down plans can be properly funded, but it will make fixing those pensions more challenging. The firefighters’ fund has just 24 cents for every dollar it owes pensioners; the policemen’s fund just 30 cents. Fixing them will be exceptionally difficult.

*Nancy Mathieson is Contributing Editor of WirePoints Illinois News.


Sort by:   newest | oldest | most voted
Rex the Wonder Dog!

Shame on you, ALL OF YOU! Firewhiners are hero’s, HERO’S, and don’t any of you lazy wannabe’s forget that.
They even made a video about their heroics…

Richard Rider

Discussions of per capita taxes in a state are not germane to this pension issue. What IS germane is the unfunded pension liability of Illinois compared to other states. IL is the 2nd worst (after Alaska, which has since instituted reforms). And it’s not close.

The per capita Illinois taxpayer obligation for unfunded pension liabilities is $6,505. The average for the other 49 states is $2,642. Hence the Illinois obligation is 246.2% higher than the average for the other 49 states.

Richard Rider
Richard Rider

From time to time, firefighter apologists still quote a couple bogus studies (that ff’s paid for) that claim that the average retired firefighter dies from 2 to 5 years after retirement — because of all the health problems on the job.

The retiree numbers in this article (and responsible studies) prove this is hogwash. Indeed, CalPERS found that retired California police and firefighters live the same average lifespan as the rest of the public employees in CalPERS — 82+ years.

you are right as usual, richard rider 🙂

Rahm and Daley have been running the Chicago Police and Fire Departments on the cheap for years and it’s not just about the pensions. Daley and Rahm have brought in two outsider hatchetmen as police superintendents. They knew the firefighters wouldn’t stand for that. Their mission was to cut personnel costs and the Department and the public be damned. Don’t hire police and hide crime numbers on paper. Are you safer? Do you see police officers patrolling your streets?

Stay Safe. Daley and Rahm have been spending the money on other things.


Chicago Tribune
Surge Of Retirements Strips Streets Of Cops
November 09, 1986
By William Recktenwald.
Chicago is losing its seasoned police officers at more than double the rate of three years ago because of resignations, disability, discharge, death and retirement, police records shows.


The “disability” category is largely bogus. Because of absurdly lax (but “legal”) requirements, many if not MOST retiring police officers declare themselves “disabled” (usually after earning the full pension) with the perfunctory review board’s blessing.

That way up to half of their lucrative pension is income tax free (federal AND state) which — because of the progressive tax rates — reduces their income tax 65% to 85%.

Most cop and ff “disabilities” are standard middle age maladies — high blood pressure, “stress,” old sports injuries, bad back, etc. Few are truly service-related (the disabilities that SHOULD qualify for the category).

Tough Love

Perfectly stated…. and just one of the MANY reasons why Taxpayers should REFUSE to fund these outrageous pension promises and let the Plans fail, and payments stop or be VERY materially reduced.


I can imagine the long line of qualified people wanting to become police officers and firemen with THAT brilliant idea!! Maybe you could call the “Ghostbusters” next time your house is on fire or your house is broken into. Although here is another brilliant idea!! Some towns have residents pay a “fee” for fire protection and if you choose not to pay it, you’re on your own. Chicago could expand that to the Police, and then you would save all sorts of tax money and be a self sufficient individual, all on your own!! Laugh at danger!!!!!

Thats the rub precisely……unrealistic expectations by some Illinois taxpayers…..who want quality government services…..but dont want taxes raised to pay for them. In effect….they want something for nothing. Tier 2 pension reform, futher calls for more pension cuts, no make-up days for the pension hollidays, hard balling wage cutting negotiations with afscme, ctu, whoever govt employee, cut. cut cut. But please rush to my house when its on fire and patrol my streets and prosecute my criminals and guard them in IDOC. Just dont look at your pay stub please. Do the same for less…..but teach our children better. Got it? Market forces at play…..we shall see….
Just because I question the cost of products or services doesn’t mean I don’t value them. I do this with every aspect of my life. At work, I’m constantly performing cost/benefit analyses to determine project feasibility. Why wouldn’t I do the same with my tax dollars? You stated: Do the same for less..but teach our children better. I worked at a company which had one of their core values read “do more with less”. That didn’t mean you weren’t appreciated. That meant to find ways to improve processes with the resources given. It means you might not have all the data necessary to make a decision, but… Read more »
Advocate this study put Illinois taxpayers at number 13….darn good when compared to states with a Major city.

D or this study put Illinois taxpayers at number 29.

Doesnt everybody think they are taxed too much?…even those that are taxed too little think hey are taxed too much and call for tax cuts and tax freezes. Somebody somewhere is actually taxed TOO little right Nixxit? We cant ALL be taxed too much could we?


Someone taxed too little? Yes, that would be retirees who are exempt from state income taxes. For everyone else, I guess it’s all relative.

Tax Foundation also has a metric called Tax Freedom Day. IL is 7th from the bottom, even with retirement income exempt. MInnesota, with a progressive state income tax rate that is 2-3x higher than IL, is only one spot below us.

Once again, I sure hope not one state employee has ever contested their property taxes…for many the very source of their own income. That would mean they don’t value the services they themselves provide.

You lost me on that one Nixit. We are not at war with ourselves. It is not public employees vrs private employees. It amazes me how ya think its wrong for a public employee to contest his property taxes…but not a private employee. Guess it more us vrs them….that will solve our mess. Its one thing to say we have a fiscal mess and we need to cut corners whereever we can. Its another to make public employees the enemy. Villanization of the school teacher over and over and over again. No!… the school teacher should not contest her property taxes even if over-accessed, yet the private… Read more »

I messed up the link is the other tax study that put overall Illinois tax at rank 29 among states

Part of our problem Nixit is I have seen varrying studies on the current overall tax burden for us taxpayers in Illinois. We can try….but I am not sure we can even agree on how Illinois taxpayers fair when compared to taxpayers from other states. Everyone wants to cite figures and stats that support thier position and ignore other stats that hurt thier position……so ya dont get a honest and fair OVERALL tax accessment. Everyone is taxed too much…or so they claim. Maybe you have an honest and fair source for comparative tax burdens….if ya do I would love to read it. Taxpayers should be value conscious… Read more »
I agree that market forces prevail. And I say let’s give those forces a chance. Tier 2 benefits have been in place for 5 years. Is there a shortage of firemen? Doesn’t look like it as there is still a line out the door waiting for that job in every municipality. Police? Its probably reflective of the community served. Does Hinsdale or similar towns have an issue attracting qualified applicants today? Quality professors? Like at Chicago State, where they graduate a tiny fraction of their students? I’m going to guess the options were limited for CSU, EIU, WIU professors to begin with. But if they can get… Read more »
Chicago Tribune Chicago, police union agree to early retirement health package July 23, 2009 By Annie Sweeney The city of Chicago and the Fraternal Order of Police have agreed on a change that will allow officers to retire five years earlier with full medical benefits — providing millions of dollars in savings to the city during the current budget crisis, officials said. – Note the cost of funding pensions is not mentioned in this and most public sector early retirement cost savings schemes. Current salary costs decrease as presumably lower paid workers replace higher paid workers. But pension and retiree healthcare costs could very well increase… Read more »

ABC 7 Eyewitness News
CPD lowers retirement age by 5 years
July 23, 2009 3:26:41 PM PDT
By Sarah Schulte and Jason Knowles
July 23, 2009 (CHICAGO) —
Hundreds of Chicago police officers are being offered an early retirement.
It’s a deal announced Thursday that city officials say would end up saving millions of dollars and help ease the city’s budget crunch.
But there is concern about whether Chicago could afford losing so many veteran officers at one time.


The Illinois Senate Democrats are once again through and article by Eric Madiar, Chief Legal Counsel to Senate President John Cullerton, asserting the problem is insignificant contributions, completely ignoring their absurd legislative track record of legislative benefit hikes to already underfunded pensions.
Their votes are public record in the Roll Calls of Senate Bills that turned into Public Acts that hiked what they state in the article is a long history of underfunded pensions.

Jim Palermo

Downstate police and fire plans have similar problems. For every five active participants there are four persons receiving a benefit check. Half of the plans have insufficient assets to cover the obligations due the inactive participants and in the aggregate, the obligations due inactives are just 95% funded, meaning the current workers are completely unfunded. Downstate plans are just 56% funded and j45% of plans have benefit payments which exceed employer and employee contributions.