Government – 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 Roofing contractors appear to often work without licenses; State regulators count on public to alert them to illegal operations and safety issues

CU-CitizenAccess.org

Roofers working in Champaign on March 1, 2025.

Roofing contractors appear to often work without licenses; State regulators count on public to alert them to illegal operations and safety issues

Post author:Piotr Fedczuk / For CU-CitizenAccess
Post published:June 4, 2025
Post category:Business Government Housing

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Google Street View

The Housing Authority of Champaign County, located at 2008 N. Market St. in Champaign. Photo from Google Street View, captured August 2023.

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Post author:Mallory Miller / For CU-CitizenAccess
Post published:June 3, 2025
Post category:Government Housing Public Funds

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Read more about the article Soybean tariffs threaten Illinois farmers again

U.S. Census Bureau

Photo from U.S. Census Bureau.

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Post author:Henry Young / For CU-CitizenAccess and CU-CitizenAccess.org
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Post category:Agriculture Food Government Public Funds

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Spent nuclear fuel shipments are transported in shielded containers designed to withstand severe conditions. (Source: U.S. Nuclear Regulatory Commission)

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Post category:Environment Government Transportation

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Mariana Quezada

The Low Income Home Energy Assistance Program office at the Champaign County Regional Planning Commission at 1776 E. Washington St. in Urbana on May 7, 2025.

Champaign County energy assistance program faces uncertain future amid federal cuts

Post author:Mariana Quezada / For CU-CitizenAccess
Post published:May 27, 2025
Post category:Government Housing Public Funds

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Aerial photo of the Clinton Nuclear Power Plant facility. Photo from the Constellation Energy website.

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Post category:Environment Government Technology

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Faith Lee

Elevate Trampoline Park exterior at 707 N. Country Fair Dr. in Champaign in late March 2025. Photo by Faith Lee.

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Post category:Business Government

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A map detailing the locations of fraternities affiliated with the University of Illinois Urbana-Champaign across Champaign provided by the Interfraternity Council.

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Post category:Education Government

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The Ameren Illinois service zone and the grid operator's zone covers much of the same territory. Source: Ambit Energy Pros (Left), MISO Planning Resource Auction for Planning Year 2025/26 Results (Right)