CHICAGO (AP) - A Wall Street rating agency says Chicago isn’t alone in grappling with underfunded city employee pensions, but that it’s in the worst shape among the nation’s 15 largest cities.
The mayor’s office had no immediate reaction to Standard & Poor’s survey of pension obligations, in which Chicago performed the worst across the board, The Chicago Sun-Times (https://bit.ly/2n3YXTA ) reported.
The city registered the highest annual debt, pension post-employment benefits costs as a percentage of governmental expenditures, and the highest debt and pension liability per capita.
The burden in Chicago is more than $12,400 per person, double New York City’s more than $6,100 per person.
Chicago also had the lowest weighted pension fund ratio, the worst pension contribution versus required level, and the lowest funded return for a single fund. That last distinction went to the Chicago Police Annuity and Benefit Fund, which had assets to cover just 25 percent of its liabilities in fiscal 2015, down from 26 percent the year prior.
Chicago also had the lowest bond rating among the cities, at BBB-plus with a stable outlook. All of the other cities had a bond rating of AA-minus or better.
The report says funded ratios reported in fiscal 2016 are likely to look worse for most cities, given weak market returns last year.
“Pension liabilities are a clear credit weakness for Chicago, which stands out with the highest pension liability per capita and the lowest weighted funded ratio among peers,” the report states.
The report said that although Mayor Rahm Emanuel’s 2017 budget contributes more toward employee pensions, the amounts budgeted still fall significantly short of the actuarially determined contributions levels.
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