October 2021 – CU-CitizenAccess.org

In order to understand why Champaign is doing so well with their pensions compared to
other Illinois cities and the state itself, we’re going to go through a little crash course about
pensions.
A pension is the benefits paid to employees after they retire, usually a predetermined
amount of money given out each month. The pension is paid out from a pension fund, which is
the pool of money that is used to pay out participating employees’ pensions. The amount of
money within the pension fund is sometimes referred to as the plan fiduciary net position.
Pension funds gain money through employee contributions (the money employees put
into the pension fund), employer contributions (the money employers put into the pension fund),
and investment returns (the money gained from the investing of pensions funds). They generally
lose money through finally paying out an employee’s pension, investment losses, and
administrative upkeep.

Two of the most important concepts when it comes to pensions are total liability and
unfunded liability. Total liability includes the previous costs associated with pensions, but also a
calculation of future costs the pension fund will have to pay for eventually, aka what they will
have to pay when all their employees retire. Employees’ average lifespans, disability rates,
spousal lifespans, etc. are used to calculate what is the most likely amount of money the pension
fund will need o have in order to pay all their employees pensions throughout their lifespan.
As employees pension benefits increase and new employees are hired, the total liability
may become larger than the amount of money the pension fund currently has. This difference
between total liability and available money in the pension fund is called unfunded liability.
Unfunded liability is not due to be paid at the time it is taken on, but there is also no
money to pay for it when it is taken on. Therefore, it is a future payment that is promised to be
paid for later or in parts over time, similar to a loan.
For example, a city establishes a fire department in 1990 with 10 firefighters that when
they retire will receive $10,000 annually. Originally, it was assumed they would collect pension
for 20 years, so the pension fund aimed to have $2,000,000 for the firefighters’ retirement. By
2000, they have the $2,000,000 in plan fiduciary net position, but at this time the state decides
that retired firefighters will receive $15,000 per year instead, and the average lifespan
assumption has increased by 5 years. The pension fund’s total liability has grown from
$2,000,000 to $3,750,000, nearly doubling their original total liability. On top of that,
investments have not returned as much as expected and the city only puts in enough money to
cover administrative costs, so the plan fiduciary net position remained unchanged. While its
$2,000,000 was originally enough to fully fund all the firefighters’ pensions, now it is only
enough to fund 53% of their pensions. There are always a lot more moving funds and

calculations involved in real life examples, but this simple example sums up what has been
happening with many Illinois city pensions.

Read more about the article Rep. Mary Miller’s spending switches from salaries to marketing strategies

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Rep. Mary Miller's official photograph.

Rep. Mary Miller’s spending switches from salaries to marketing strategies

Post author:Mona Alrazzaq / For CU-CitizenAccess
Post published:October 29, 2021
Post category:Government

Mary Miller, Republican representative from the 15th District of Illinois, has spent $161,844 on her 2021-2022 cycle thus far, compared to $575,024 from her…

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Mike Quigley's most recent official photograph.

Rep. Mike Quigley’s campaign spending drops, Democratic party still benefits

Post author:Nic Meister / For CU-CitizenAccess
Post published:October 29, 2021
Post category:Government

As Quigley seeks reelection for the seventh time to represent Illinois’ 5th district, he is planning to follow the winning strategy he’s developed: supporting the Democratic party, utilizing fundraising consultants and events and saving up for future contested elections.

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The most recent official photograph of Cheri Bustos.

Rep. Cheri Bustos starts returning campaign funds after retirement announcement

Post author:Diana Anghel / For CU-CitizenAccess
Post published:October 28, 2021
Post category:Government

At the end of April, Bustos had gathered just over $450,000 in funds, but by the end of June, her disbursements were just over $240,500, accounting for over half of her donations. Specifically, Bustos has spent almost $30,000 on contribution refunds, giving back to her donors after announcing she is not running for reelection. This is her second-largest expenditure of the year, next to fundraising services.

Read more about the article Rep. Brad Schneider decreases campaign spending so far from last election

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Rep. Brad Schneider of Illinois's 10th district.

Rep. Brad Schneider decreases campaign spending so far from last election

Post author:Rachel Gardner / For CU-CitizenAccess
Post published:October 28, 2021
Post category:Government

Democratic congressional incumbent Brad Schneider has sharply decreased his campaign spending from $3,024,001 in 2019-2020 to a spending just a little over half a…