By the City of Chicago’s own financial report for 2025, issued June 30, 2026, the city’s four pension funds held $14.20 billion against $50.63 billion of pension liability on December 31, 2025 — $36.43 billion short, 28.1 percent funded, up from 25.4 percent a year earlier. Fund by fund, on that report’s basis: police 26.44 percent, fire 25.25, municipal employees 28.18, laborers 44.10. The funds’ own actuaries — in valuations dated April to June 2026 for the police, fire and laborers’ funds, and May 2025 for the municipal fund, the latest it has posted — project that none of the four passes 50 percent before 2043 on the contribution schedule state law sets — police, fire and laborers in 2043, municipal employees in 2048 — and 90 percent in 2055 or 2058. The claim, as commonly heard, is that the funds are broke. The record is more specific than that: in 2025 the four funds paid $2.87 billion in benefit payments and refunds, took in $2.85 billion from the city, $444 million from employees and $1.38 billion from investments, and ended the year $1.79 billion larger than they began it; their actuaries call them “severely underfunded,” describe the state schedule as “back-loaded,” and in the police fund’s case write that they “do not endorse” it. Every figure below is from the city’s report, the funds’ valuations, the state insurance department’s filing summary, or the City Council’s own analysts — each document linked in the section that draws on it, with PDF page numbers under every table and in the method note; this page adds arithmetic and takes no position.
City of Chicago FY2025 Annual Comprehensive Financial Report (June 30, 2026) · actuarial valuations of the four funds (police and laborers as of Dec. 31, 2025; fire as of Dec. 31, 2025; municipal as of Dec. 31, 2024, the latest posted) · Illinois Department of Insurance 2025 Biennial Report · Council Office of Financial Analysis · Public Act 104-0065 · retrieved Aug. 22, 2026Four funds, one report: where each stood on December 31, 2025
Chicago’s city government sponsors four pension funds, each a separate legal entity with its own board and its own actuary: the Policemen’s, the Firemen’s, the Municipal Employees’ and the Laborers’ annuity and benefit funds. (Teachers, park employees, transit workers and Cook County workers are in other funds, and are not in these figures.) The city’s Annual Comprehensive Financial Report for 2025 reports all four on one accounting basis, as of the same day. In thousands of dollars, as its pension note states them (PDF page 97):
| Fund | Total pension liability ($000) | Fiduciary net position ($000) | Net pension liability ($000) | Funded (net position ÷ liability) | People covered |
|---|---|---|---|---|---|
| Policemen’s | 18,886,619 | 4,993,425 | 13,893,194 | 26.44% | 27,748 |
| Firemen’s | 8,029,795 | 2,027,245 | 6,002,550 | 25.25% | 10,407 |
| Municipal Employees’ | 20,564,556 | 5,794,678 | 14,769,878 | 28.18% | 94,038 |
| Laborers’ | 3,150,237 | 1,389,298 | 1,760,939 | 44.10% | 7,676 |
| All four | 50,631,207 | 14,204,646 | 36,426,561 | 28.06% | 139,869 |
The $36.43 billion the city labels its net pension liability is the table’s fourth column, liability less net position; the 28.1 percent is $14,204,646 thousand divided by $50,631,207 thousand. The 139,869 people are the report’s count of everyone “covered by benefit terms” at year end: 49,711 receiving benefits, 31,686 former employees entitled to a benefit but not yet drawing one, and 58,472 active employees. The police fund’s actuary puts its version plainly: “There are more participants receiving benefits under the Fund than active members accruing benefits” — 14,895 receiving against 11,639 active at the end of 2025, with an average retiree benefit of $6,763 a month.
What came in and what went out in 2025
The same note records the year’s flows for the four funds together. The city contributed $2,852.8 million (a figure that includes $271.9 million the city calls an advance or supplemental contribution, above what the statute required); employees contributed $443.7 million; net investment income was $1,375.5 million; benefit payments and refunds were $2,865.2 million; administrative expenses $19.4 million. Net, the funds’ fiduciary net position grew by $1,787.5 million, and each of the four grew: the municipal fund by $737.4 million, the police fund by $668.0 million, the fire fund by $253.0 million, the laborers’ fund by $129.1 million. Benefit payments and refunds exceeded what the city put in; the funds grew because employee contributions and investment returns covered the rest and more.
Two dates after the year end are on the record too. On January 16, 2026, the city made its planned supplemental payment to the four funds, $129.8 million (the report’s subsequent-events note). And the report’s risk note says the city “adjusted the timing of a portion of its discretionary advance pension contribution to preserve operating liquidity” in January 2026, because the city depends on Cook County’s property-tax remittances to fund “statutory annual pension contributions exceeding $2.6 billion” and the county had announced later-than-usual 2025 tax bills. The City Council’s Office of Financial Analysis, in its one-page brief on the pension system, calculates that in 2025 “nearly 4 out of every 5 property tax dollars (78%) supported pensions” and that the city paid about $2.9 billion in pension costs that year; its analysis of the 2026 budget forecast puts 2026 at an estimated $2.843 billion, down from $2.850 billion, with $259.6 million of that supplemental. (The property-tax side of this is the subject of our property-tax hub.)
“Funded ratio” has more than one official answer — for the same funds, the same day
The city issued two documents on June 30, 2026. Its financial report’s transmittal letter says the aggregate funded ratio “increased from 25.4% at the end of fiscal year 2024 to 28.1% at the end of fiscal year 2025,” which is what its pension-note table divides to (25.37 and 28.06 percent). Its press release the same day says the ratio, “on a fair-value basis, increased from 25.63% to 28.15%.” Both are official; they are not the same calculation. This page reproduces the release’s figures exactly by dividing the funds’ year-end assets by their actuarial accrued liabilities — the liability measure each fund’s valuation uses for the state’s funding statute — rather than by the total pension liability the accounting standard uses in the report: $12,417,134 thousand over the four funds’ December 2024 accrued liabilities is 25.63 percent, and $14,204,646 thousand over their December 2025 accrued liabilities is 28.15 percent. (For the municipal fund, whose December 2025 valuation is not yet posted, the recomputation uses the liability the city’s report carries for it; that fund’s accounting discount rate, 6.75 percent, equals its funding rate, so the two measures coincide — the identity the fire fund’s actuary states for the fire fund in the same situation.)
The two liability measures differ because the accounting standard discounts future benefits at a blended rate when a fund’s assets are projected to run short of paying them — 6.65 percent for the police fund and 6.70 for the laborers’ fund in the city’s 2025 report, against the 6.75 percent both funds assume for funding — which makes the accounting liability larger. The police fund’s valuation says it in one line: “Funded status is measured differently for statutory funding and for Fund and City financial reports.” And inside each fund’s own valuation there are three more ratios, one for each way of valuing the assets — smoothed (“actuarial value”), market and book. As the four funds’ latest posted valuations print them:
| Fund (valuation date) | Actuarial-value basis | Market (fair) value basis | Book-value basis | City report, GASB basis |
|---|---|---|---|---|
| Police (Dec. 31, 2025) | 26.08% | 26.66% | 21.65% | 26.44% |
| Fire (Dec. 31, 2025) | 24.67% | 25.25% | 22.15% (as printed) | 25.25% |
| Laborers (Dec. 31, 2025) | 43.48% | 44.33% | 36.07% | 44.10% |
| Municipal (Dec. 31, 2024) | 25.78% | 25.38% | 21.02% | 28.18% (Dec. 31, 2025) |
So the police fund on December 31, 2025, was 26.08, 26.66, 21.65 or 26.44 percent funded depending on which official document is open — and every one of those is correct on its own basis. (One small thing found and left as found: the fire fund’s valuation prints its book-value ratio as 22.15 percent; its own book value and liability divide to 22.16.) A figure quoted without its date and basis cannot be checked against any of them.
What the law requires the city to pay, and what the actuaries compute
Illinois law sets the city’s contributions by formula: for the police and fire funds, Public Act 99-0506 (2016) requires payments sufficient to reach 90 percent funding by the end of 2055; for the municipal and laborers’ funds, Public Act 100-0023 (2017) requires 90 percent by the end of 2058. Each fund’s actuary also computes a separate number the accounting standard requires, the actuarially determined contribution — what an actuarial funding policy would call for — and the city’s report carries a ten-year schedule for every fund (PDF pages 122 and 123) setting that determined figure beside what the city actually paid each year; the paid figures are the statutory amounts plus, from 2023 on, the city’s supplemental payments above them. The schedule’s own footnotes say why the two differ: the police, fire and laborers’ statutory funding policies, in the actuaries’ words, do not “conform to Actuarial Standards of Practice.” In thousands of dollars:
| Fund | 2016 actuarially determined | 2016 paid | 2025 actuarially determined | 2025 paid | 2016–2025 determined | 2016–2025 paid | Paid as share |
|---|---|---|---|---|---|---|---|
| Policemen’s | 785,695 | 273,840 | 1,339,134 | 1,112,661 | 10,425,500 | 7,338,050 | 70.4% |
| Firemen’s | 333,952 | 154,101 | 554,650 | 460,268 | 4,638,326 | 3,422,222 | 73.8% |
| Municipal Employees’ | 961,770 | 149,718 | 1,283,237 | 1,123,999 | 11,577,752 | 6,528,720 | 56.4% |
| Laborers’ | 117,033 | 12,603 | 170,345 | 155,996 | 1,475,556 | 857,397 | 58.1% |
| All four (this page’s sum of the four rows) | — | — | — | — | 28,117,134 | 18,146,389 | 64.5% |
Over the ten years the schedule covers, the city paid $18.15 billion of the $28.12 billion its funds’ actuaries determined, 64.5 percent — 56 percent for the municipal fund, 58 for laborers, 70 for police, 74 for fire — with the share rising steeply after the 2016 and 2017 laws took hold: the municipal fund paid 16 percent of its determined contribution in 2016 and 88 percent in 2025, the police fund 35 and 83 percent. The 2025 column already includes the city’s supplemental payments; the footnotes count $168.7 million for the municipal fund, $67.4 million for police, $20.2 million for laborers and $15.6 million for fire inside the 2025 figures. The sums here are the schedule’s ten figures added; its footnotes note that the actuarial definition changed over the decade, so the ten-year share is a reading of the schedule as printed, not a single-method measure.
The funds’ newest valuations state the gap going forward in their own words. The police fund’s December 31, 2025 valuation puts the 2026 actuarially determined contribution at “approximately $1,416.7 million, or 98.8% of payroll, which compares to the current statutory contribution of $1,040.3 million or 72.6% of payroll,” and says of the statute: “we do not endorse this funding policy because the Statutory funding policy defers funding for benefits into the future and places a higher burden on future generations of taxpayers.” The fire fund’s December 31, 2025 valuation puts its 2026 figure at $588,720,377 against a statutory $441,746,521, “a contribution deficiency” of $146,973,856, and opens with “FABF is a severely underfunded plan” and states: “We strongly recommend an actuarial funding method that targets 100% funding where payments at least cover the normal cost plus interest on the UAL and a portion of the principal balance.” The laborers’ fund’s December 31, 2025 valuation says $170 million is needed in 2026 against the statutory $137 million, that statutory contributions “have been less than the Actuarial Determined Contribution for the past 20 years” and actual contributions “for the past 22 years,” and that “Contributions continue to be insufficient to adequately finance the plan.” The municipal fund’s December 31, 2024 valuation — the latest on its site — puts the 2025 determined contribution at $1,283,237,312 against a statutory $955,738,601, a deficiency of $327,498,711, and leads its findings with: “MEABF remains at risk of having to liquidate invested assets at inopportune times to pay monthly benefits due to the current low funding level and expected timing of employer contributions.”
The schedule’s own arithmetic: where the actuaries project the funds to be
Each valuation carries a year-by-year projection under the statutory schedule, on the fund’s own assumptions (6.75 percent investment returns, the city paying exactly what the statute sets and, for funding purposes, no further supplemental payments). Read from those tables, on the actuarial-value basis each fund uses:
| Fund | Starting point | A decade-plus on | First year at or above 50% | Year the schedule reaches 90% | Source table |
|---|---|---|---|---|---|
| Police | 26.1% (2025) | 35.6% (2034) | 2043 (50.4%) | 2055 | Table 3A, valuation |
| Fire | 24.7% (2025) | 35.2% (2034) | 2043 (50.8%) | 2055 | Exhibit 9, valuation |
| Laborers | 43.5% (2025); 43.0% (2026) | 48.5% (2040) | 2043 (50.8%) | 2058 | Table 4, valuation |
| Municipal | 25.8% (2024); 27.2% (2025 proj.) | 32.8% (2034) | 2048 (52.4%; 49.9% in 2047) | 2058 | Exhibit 8, valuation |
The police fund’s actuary summarizes its table as a ratio that “is not projected to even reach 50% funded for another 18 years until 2043” and calls the schedule “back-loaded”; the laborers’ actuary writes that its ratio “does not reach 50 percent until 2043,” that “most of the increase in the funded ratio occurs after 2043,” and names the pattern “back-loading”; the fire fund’s says the ratio “is projected to remain below 50% through 2042.” These are projections on stated assumptions, and the valuations say so at length; a year of returns far from 6.75 percent, a change in law, or contributions above or below the schedule moves every line.
The 2025 law, and what the documents say it added
Public Act 104-0065, effective August 1, 2025, amended the Tier 2 provisions of the police and fire articles of the Illinois Pension Code (40 ILCS 5/5-238 and 5/6-229) — the rules for officers and firefighters hired since January 1, 2011. In the city report’s summary, it changed the pensionable-salary cap and survivor benefits for both funds and the final-average-salary rule for the police fund, which now takes “the greater of the highest average salary for eight consecutive years within the last ten years of service or four consecutive years within the last five years.” The fire fund’s valuation lists the cap at $141,408 from July 1, 2025 and $145,650 from July 1, 2026; the police fund’s valuation describes the cap’s annual growth moving “from 50 percent of CPI-U to 100 percent of CPI-U, not to exceed 3.0 percent.” What the documents measure: the city’s report books the law as a benefit change that “increased total pension liability by $300.4 million, consisting of $157.9 million for Policemen’s and $142.5 million for Firemen’s”; the police valuation says it “increased the actuarial liability by $209 million” on its funding basis; the fire valuation says $116.7 million on its. The city’s budget office, as the Council’s analysts relay it, “anticipates an additional $11 billion in long-term pension liabilities to the police and fire pension systems through 2055” and about $60 million a year in added statutory contributions. The fire fund’s valuation records a second 2025 event on its own: an October 2025 salary agreement with retroactive raises for 2021 through 2025, booked as a $202.8 million experience loss.
Ten years of the ratio, fund by fund, on the city’s accounting basis
The report’s required supplementary schedules carry each fund’s fiduciary net position as a percentage of its total pension liability for ten years. Selected years:
| Fund | 2016 | 2019 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|
| Policemen’s | 21.85% | 21.38% | 21.50% | 21.79% | 23.86% | 26.44% |
| Firemen’s | 19.79% | 17.57% | 18.81% | 21.62% | 23.70% | 25.25% |
| Municipal Employees’ | 19.05% | 23.64% | 20.68% | 22.22% | 25.03% | 28.18% |
| Laborers’ | 31.61% | 42.78% | 39.95% | 38.55% | 40.29% | 44.10% |
Every fund’s 2025 ratio is its highest in the ten years shown except the laborers’, which stood higher in 2017 (48.19 percent) and 2021 (45.92); the police and fire funds sat between 16.57 and 23.86 percent in the nine years before 2025. The state’s insurance department, which collects every Illinois public fund’s annual statement, prints the same four funds in its 2025 biennial report on the statutory (actuarial-value) basis at December 31, 2024: police 24.63 percent, fire 24.40, municipal 25.78, laborers 42.65 — beside the Chicago Teachers’ Pension Fund at 74.03, the Illinois Municipal Retirement Fund at 96.26, and all Illinois systems and funds combined at 49.18.
If you are reading a pension figure and want to check it
The primary documents are public, the newest posted version of each is linked here, and each carries its date and basis on its face. The city posts its annual reports on the Department of Finance’s financial statements page (the 2025 report’s pension note begins on PDF page 91 and its ten-year schedules on page 114); the Council Office of Financial Analysis posts its reviews of each year’s report. The funds post their valuations: the police fund on chipabf.org, the fire fund under Fund Reports (the table headed “Actuarial Evaluation, Audited Financial Statements and GASB Reports”), the laborers’ fund under Fund Reports, and the municipal fund as PDFs on meabf.org (its December 31, 2024 valuation is the latest there as of this reading; its Financial Reports page showed no report links when read). The Illinois Department of Insurance’s Public Pension Division publishes the biennial report that places every fund on one table.
Three things to match before two figures are compared: the date (valuations are as of December 31 and appear four to six months later; the city’s report follows at the end of June); the basis (actuarial value, market value, book value, or the accounting standard’s net-position-over-total-liability); and the fund, since the four differ by twenty points. What none of these records can say: what the funds will earn, whether future budgets and legislatures will keep the schedule, what a change in law would add or remove, or what any single retiree is owed. Those are the statements the documents themselves label as projections and assumptions, and this page leaves them so.
What this page does not do
It does not combine figures from different bases or documents into any total of its own: the four-fund totals here are either the city report’s own or sums of that one report’s own schedule lines, labeled as such where they appear (the ten-year contribution totals); the only recomputation across documents is the one that reproduces the press release’s ratio, shown with its inputs. It does not rank Chicago against other cities; the state report’s table is quoted as the state prints it. It does not forecast, and it does not propose a contribution amount for the city or the state; the actuaries’ recommendations appear as theirs. It does not reprint benefit formulas beyond what the documents summarize, or any individual’s pension. The municipal fund’s newest figures are a year older than the other three because that is what the fund has posted; where that matters, the date is beside the number. Dollar figures are quoted without inflation adjustment.
- City documents City of Chicago, Annual Comprehensive Financial Report, year ended December 31, 2025 (issued June 30, 2026) (pension note PDF pages 91–98; required supplementary information pages 114–123; transmittal letter pages 12–13; risk and subsequent-events notes pages 105 and 111) and the same-day press release; the Council Office of Financial Analysis’s Chicago City Council Office of Financial Analysis, FY 2026 Budget Forecast Analysis and Chicago City Council Office of Financial Analysis, ‘Understanding Chicago’s Pension System’ (one-page brief).
- Fund documents Policemen’s Annuity and Benefit Fund of Chicago, Actuarial Valuation Report for the Year Ending December 31, 2025 (Gabriel, Roeder, Smith & Co., May 22, 2026); Laborers’ and Retirement Board Employees’ Annuity and Benefit Fund of Chicago, Actuarial Valuation Report for the Year Ending December 31, 2025 (GRS, April 21, 2026); Firemen’s Annuity and Benefit Fund of Chicago, Actuarial Valuation and Review as of December 31, 2025 (Segal, June 12, 2026) and its December 31, 2024 predecessor; Municipal Employees’ Annuity and Benefit Fund of Chicago, Actuarial Valuation and Review as of December 31, 2024 (Segal, May 21, 2025; revised).
- State documents Illinois Department of Insurance, Public Pension Division, 2025 Biennial Report (2023-2024 data) (tables on PDF pages 5–6) and Public Act 104-0065 as posted by the Illinois General Assembly.
- Checking Every figure quoted was located on its cited PDF page by a script before this page was built (167 figures), and the arithmetic this page adds — funded ratios from each document’s own assets and liabilities, the ten-year contribution sums, the fund-by-fund growth in 2025, and the press release’s ratio recomputed from the funds’ accrued liabilities — was asserted against the documents’ printed results, with one exception recorded rather than resolved: the fire fund’s book-value ratio, printed 22.15 percent where its own figures divide to 22.16. All documents retrieved August 22, 2026.
Compiled by KCM Desk from the city’s, the funds’ and the state’s posted documents, retrieved August 22, 2026. If you spot an error, corrections come first.
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