Chicago Municipal Employees Annuity & Benefit Fund
public plan · City of Chicago · Chicago, IL
Chicago Municipal Employees Annuity & Benefit Fund is severely underfunded at 25%, with $18.0B 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 Municipal Employees 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.
Chicago Municipal Employees Annuity & Benefit Fund is among the larger U.S. pension plans by asset base ($6.1B). The participant pool of 59,000 divides into 27,000 actives and 32,000 retirees, a mix that shapes both cash-flow profile and investment-horizon choices. The participant mix runs roughly even between 27,000 active workers and 32,000 retirees — a balanced demographic profile that gives the plan time to compound investment returns before payouts dominate cash flow. Annual cash flows: $700M in sponsor contributions versus $1.1B in benefit payments. Investment performance over the most recent year ran 4.2%, 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 Municipal Employees 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 Municipal Employees Annuity & Benefit Fund is significantly underfunded at 25%, with $18.0B in unfunded liabilities affecting 59,000 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 | $6.1B | $24.1B | 25.3% | $700.0M |
| 2022 | $5.9B | $24.7B | 24.0% | $679.0M |
| 2021 | $5.7B | $21.2B | 27.0% | $658.0M |
| 2020 | $5.6B | $26.4B | 21.0% | $637.0M |
| 2019 | $5.4B | $24.4B | 22.0% | $616.0M |
Frequently Asked Questions
Chicago Municipal Employees Annuity & Benefit Fund is 25% funded, meaning it has 25 cents in assets for every dollar in future benefit obligations. This is significantly underfunded and participants should monitor the situation closely.
Chicago Municipal Employees Annuity & Benefit Fund has 59,000 total participants, including 27,000 active employees and 32,000 retirees currently receiving benefits.
Chicago Municipal Employees 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.