Evanston aldermen tonight are scheduled to decide how much residents will have to pay in taxes next year to fund public safety pensions.
The City Council will get a report from the city’s pension actuary showing that after years of generally weak investment returns, the city’s public safety pension funds — along with the rest of the market — did somewhat better in 2012.
The fire pension pension fund earned 6.43 percent and the police pension fund earned 9.15 percent in 2012. Both had earned less than 2 percent in 2011.
The improved returns and the City Council’s decision to put an extra $500,000 into the fund last year led to a modest improvement in each pension system’s funded ratio.
The firefighter’s fund went from 45.6 percent to 47.3 percent funded. The police fund went from 45.3 percent to 46.5 percent funded.
Actuary Arthur Tepfer is recommending that the city contribute $8.36 million to the police fund and $6.24 million to the fire fund next year. Combined that’s an increase of $362,568 from his recommendation for last year but $137,432 less than what the city actually contributed.
The actuary is also recommending that the city reduce its assumption of future investment returns from 7 percent to 6.75 percent.
Concern about huge unfunded pension liabilities — now estimated at $68 million for the firefighters and $89 million for the police and possibly overly optimistic assumptions about future investment returns — has led to recent downgrades of the city’s credit rating by bond rating services.