Chicago Firefighters Annuity & Benefit Fund
public plan · City of Chicago · Chicago, IL
Chicago Firefighters Annuity & Benefit Fund is severely underfunded at 20%, with $7.8B in unfunded liability. Plans in this bracket face significant solvency risk and are typically on regulatory funding-improvement plans, with active intervention from PBGC for private plans or state pension boards for public ones.
City of Chicago runs Chicago Firefighters Annuity & Benefit Fund as a public-sector defined-benefit plan. The plan operates outside the ERISA framework; oversight comes from state pension boards and the sponsor's legislative body rather than the federal Department of Labor or PBGC. The plan is in critical or declining status — formally recognized as having insufficient assets to meet projected obligations. Plans in this bucket face mandatory funding-improvement plans and, for private plans, potential PBGC intervention.
The plan is mid-sized: $1.9B in assets, 13,500 participants (5,000 active, 8,500 retired). Mid-sized plans often outsource investment management to institutional advisors and follow standard actuarial conventions. Participant mix skews toward retirees (8,500 retired vs 5,000 active) — a mature plan paying out more than it accrues. Mature plans need stable investment returns plus sponsor contributions to keep the funded ratio steady; the cash-flow profile is increasingly net-negative. Annual cash flows: $300M in sponsor contributions versus $500M in benefit payments. Investment performance over the most recent year ran 3.8%, against the plan's assumed long-term return of 7.0%.
PBGC risk classification: critical. The plan faces mandatory rehabilitation under PBGC rules; participants should monitor benefit guarantees carefully. Public plans like Chicago Firefighters Annuity & Benefit Fund are not PBGC-insured. The benefit guarantee rests on the sponsoring government's ability and willingness to make required contributions, which interacts with state and local tax-base dynamics.
Source: DOL EFAST2 Form 5500 filings and Boston College CRR Public Plans Database.
Funding History
What This Means for You
Chicago Firefighters Annuity & Benefit Fund is significantly underfunded at 20%, with $7.8B in unfunded liabilities affecting 13,500 participants. Plans at this funding level face difficult choices: raising contributions substantially, reducing future benefit accruals, or in extreme cases, applying for benefit suspensions. The PBGC has flagged this plan as critical status. Public plans cannot declare bankruptcy, but severe underfunding may lead to reduced cost-of-living adjustments or increased employee contributions. If you are a participant, it is important to understand your options and consider diversifying your retirement income sources.
Year-by-Year Funding
| Year | Assets | Liabilities | Funding Ratio | Contributions |
|---|---|---|---|---|
| 2023 | $1.9B | $9.7B | 19.5% | $300.0M |
| 2022 | $1.8B | $9.7B | 19.0% | $291.0M |
| 2021 | $1.8B | $8.5B | 21.0% | $282.0M |
| 2020 | $1.7B | $10.8B | 16.0% | $273.0M |
| 2019 | $1.7B | $9.8B | 17.0% | $264.0M |
Frequently Asked Questions
Chicago Firefighters Annuity & Benefit Fund is 20% funded, meaning it has 20 cents in assets for every dollar in future benefit obligations. This is significantly underfunded and participants should monitor the situation closely.
Chicago Firefighters Annuity & Benefit Fund has 13,500 total participants, including 5,000 active employees and 8,500 retirees currently receiving benefits.
Chicago Firefighters Annuity & Benefit Fund is not covered by the PBGC. Benefits depend entirely on the plan's assets and the sponsor's ability to fund it.
The Pension Health Score (0-100, A-F) measures a pension plan's financial strength based on funding ratio (50%), funding trend over 3 years (30%), and PBGC risk level (20%). Higher scores indicate more secure retirement benefits.
Pension Health Score is calculated from funding ratio, 3-year funding trend, and PBGC risk classification.