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Chatham gets mixed news about its pensions

Thomas Clatterbuck

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The Village of Chatham received an update on the status of their pensions this week. Overall, the funding percentage of the police pension has gone up 1.65 percent, which is good news. However, the pension is still only 59.26 percent funded.

Pensions are funded both by direct monetary contributions and by profits from investing those contributions. Last year, the investment income was more than enough to cover the payments to pensioners. That meant all of the new contributions went directly to closing the funding gap. But although the investment income was enough to cover the payments, it was lower than anticipated. Lost investment income has to be made up by additional contributions from the village. This, combined with normal salary increases, mean that the village’s expected contribution will be larger next year.

But even this cloud shows a silver lining. The markets giveth, and the markets taketh away. Even minor shifts in investment performance can dramatically change funding percentages. The fact that Chatham is still making progress towards its funding goals despite underperformance in its investments means the village leadership is doing what it should be doing to meet its pension obligations. And an annual increase in funding percentage of 1.65 percent still puts the village on track to reach the state’s 90 percent funding goal by 2040.

You can read the full report here, or watch the presentation here.

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Senior strategist, statehouse reporter and political correspondent for Springfield Daily. Graduate of District 117 and UIS. Thomas covers stories in both Morgan and Sangamon Counties, as well as statewide politics.

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