Chicago Policemen's Annuity & Benefit Fund
public plan · City of Chicago · Chicago, IL
Chicago Policemen's Annuity & Benefit Fund is severely underfunded at 23%, with $15.8B 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.
Chicago Policemen's Annuity & Benefit Fund is a public-sector pension plan sponsored by City of Chicago — covering government employees (state, local, or special-district workers). Public plans are not ERISA-governed and not PBGC-insured; they rely on state-level oversight and tax-base solvency. 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: $4.8B in assets, 31,000 participants (13,000 active, 18,000 retired). Mid-sized plans often outsource investment management to institutional advisors and follow standard actuarial conventions. Active and retired participants are roughly balanced (13,000 active, 18,000 retired). The plan is in a steady-state cash-flow phase where new accruals offset benefit payments. Annual cash flows: $600M in sponsor contributions versus $1.0B in benefit payments. Investment performance over the most recent year ran 4.1%, 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 Policemen's 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 Policemen's Annuity & Benefit Fund is significantly underfunded at 23%, with $15.8B in unfunded liabilities affecting 31,000 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 | $4.8B | $20.6B | 23.3% | $600.0M |
| 2022 | $4.7B | $21.2B | 22.0% | $582.0M |
| 2021 | $4.5B | $18.0B | 25.0% | $564.0M |
| 2020 | $4.4B | $23.0B | 19.0% | $546.0M |
| 2019 | $4.2B | $21.1B | 20.0% | $528.0M |
Frequently Asked Questions
Chicago Policemen's Annuity & Benefit Fund is 23% funded, meaning it has 23 cents in assets for every dollar in future benefit obligations. This is significantly underfunded and participants should monitor the situation closely.
Chicago Policemen's Annuity & Benefit Fund has 31,000 total participants, including 13,000 active employees and 18,000 retirees currently receiving benefits.
Chicago Policemen's 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.