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Aldermen to spin pension wheel again

Evanston aldermen tonight will try again to agree on what assumptions the city should use in setting aside money for public safety pension.

At their last meeting, several aldermen, prompted by complaints from the local pension boards that the assumptions provided by the city’s actuarial firm were too rosy, asked staff to survey what numbers other municipalities are using.

Evanston aldermen tonight will try again to agree on what assumptions the city should use in setting aside money for public safety pension.

At their last meeting, several aldermen, prompted by complaints from the local pension boards that the assumptions provided by the city’s actuarial firm were too rosy, asked staff to survey what numbers other municipalities are using.

After looking at 11 other metro-area communities, the staff report to be presented tonight concludes that Evanston’s key assumption of projected investment return is more conservative than average.

The other towns are assuming investment yields averaging 7.61 percent with a range from 7 percent in Oak Lawn and Tinley Park to a high of 8.25 percent in Skokie.

Evanston currently assumes a 7.25 percent return, but staff is proposing to cut that to 7 percent.

The pension board representatives have proposed a further reduction to 6.75 percent.

The new staff report looks at several additional changes to more conservative assumptions suggested by the pension boards — including using mortality tables that assume retirees will live longer and higher estimates for rates of salary increases and wage inflation.

If all the more conservative assumptions were adopted, the city would have to increase its public safety pension contributions by nearly 23 percent next year — instead of the 13 percent increase called for by the staff report.

Assuming there were no compensating cuts in city expenditures, that would mean an increase of 8.1 percent in the city’s property tax levy next year, compared to a 4.6 percent increase under the plan recommended by staff.

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