CTPF has been asking members to help educate lawmakers about the importance of full funding. How is CTPF funded?

CTPF receives funds from four main sources: employees who contribute 9% of their salary, the employer who makes contributions on a schedule determined by Illinois law, the State of Illinois, and income from investments. When all sources contribute to the fund, pensions provide an efficient and cost-effective way to deliver retirement benefits. 

CTPF 2014 Revenue Sources

Why do members need to contact Illinois legislators to
ask for full funding?

CTPF is governed by Illinois law and changes to the fund or its funding schedule have to be made by statute. We know from past experience that when CPS has difficulty with their finances, they have turned to the Illinois legislature for "relief" or a "holiday" to avoid making payments to the Fund. 

For example, legislation passed in 1995 allowed CPS to postpone payments to the fund from 1996-2005. Additional legislation passed in 2010 allowed CPS to make reduced payments for a three-year period, from 2010-2013, and extended the payment schedule to 2059. Together these holidays and reductions cost our fund more than $3.2 billion in revenue.

The problem with these "holidays" and reductions is that
the amount of money we pay our retirees doesn't
change just because CPS doesn't pay. We still have to pay pensions every month. The Fund currently liquidates between $80 and $100 million each month to make payments to
our retirees. 

We ask our members to educate legislators because we can't afford another pension holiday. We need regular, stable, predictable payments to the Fund. 

Why is it important for CPS to make a full payment to the Fund?

The easiest way to think of it is like a credit card. If you skip a payment, or just pay a  minimum amount, you still owe the amount you borrowed, plus interest, and that interest builds up over time. It doesn't get any easier to pay. We know from the past that promises from CPS haven't been kept and we can't allow the mistakes of the past to be repeated.  
 Click here to read more about the Mistakes of the Past. 

The chart illustrates the amount that CPS should have contributed to CTPF as determined by the Fund's actuary compared to the amount actually contributed.

How does CPS decide how much to pay?

The amount CPS must pay each year is determined by Illinois law. The law currently includes a funding schedule that brings our funded ratio up to 90% by the year 2059 (we're currently at 51.5%). CTPF can't negotiate or change the payment amount, it's determined by Illinois law.

Why is CTPF calling for full pension funding if there's a financial crisis at CPS?

CTPF pensions provide the primary form of financial security for our members who do not contribute to Social Security during employment. Our trustees have a fiduciary duty to protect the Fund so it can continue to provide these benefits. Our duty is to our members and our Fund. We must also continually remind CPS of their moral and legal obligation to fund pensions. 

What has the Fund done to protect pensions?

Our Trustees have spent years educating our Illinois lawmakers about the importance of full funding, and fighting for revenue for our members. We began sounding the alarm about pension funding with a letter to legislators in 2007, and have continued ever since. 

Prior to 1995 CTPF did not have to depend on CPS making payments, we received revenue directly from a tax levy. This past spring we made great progress on HB 3695 which would have restored the dedicated tax levy to CTPF and provided a stable source of revenue for our Fund. 
 

This legislation passed Illinois House and Senate Executive Committee in the spring, but wasn't called for a vote in the Senate. We will continue to educate lawmakers and to advocate for stable and predictable funding from CPS and the State of Illinois. 

If CPS doesn't make their payment by June 30 will I still get my pension check in July?

Yes. Payments for July will be made on time and on schedule. CTPF currently has more than $10 billion in assets, and we will make regularly scheduled pension payments. 

The Fund will celebrate its 120th Anniversary on July 1, 2015. We have never missed a pension payment and we will continue to work with our employer, the Illinois legislators, and our members to make sure that we have the resources to provide pensions for the next 120 years.