The Impacts of Funding Reforms and Investment Returns on Fund Solvency
Source: Illinois Public Policy Institute

Unfunded pension liabilities are one of the greatest fiscal concerns for Illinois’
state and local governments. This concern became more acute as unfunded pension
liabilities grew in the face of declining asset values following the recent
recession; however, there are many further factors. These factors include
employers’ funding levels, benefit changes, and misestimation of future demographics
and payroll.

The Illinois Public Policy Institute requested that Anderson Economic Group
estimate the impact of various factors on police and fire pension funding levels
in downstate Illinois. In this report, we look in particular at the past and projected
future performance of downstate police and fire pension funds in Illinois
under different employer funding requirements. We also benchmark the performance
of fund investments by comparing investment returns across a sample of
municipalities over the last 25 years to a benchmark index.

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