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 No vacancy: Getting on waiting lists for subsidized housing can take years

Robert Holly

Linda Tortorelli recently tried getting a housing voucher for her son, who has a behavioral disability, but learned there already is an extensive voucher waiting list of more than 400 families in Champaign County.

No vacancy: Getting on waiting lists for subsidized housing can take years

Post author:Robert Holly / For CU-CitizenAccess
Post published:June 25, 2013
Post category:Housing

Linda Tortorelli recently faced the challenge of finding affordable housing for her 23-year-old son, Patrick, in Champaign. Her task was complicated by the fact Patrick has Smith-Magenis syndrome, a rare chromosomal condition that causes behavioral disorders. Because her son qualified for government assistance under a federal housing voucher program, Tortorelli called the Housing Authority of Champaign County to seek a voucher that would allow him to live in an apartment of his own.

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Robert Holly

The Urbana Free Library - Urbana, Illinois

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Post published:June 19, 2013
Post category:Article Neighborhoods

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Danielle Sheppard

Reduced weight limits still allow two Mahomet-Seymour School District buses to cross the reduced one lane bridge in Mahomet, but buses will be re-routed during upcoming repairs.

Long delays for funding plague bridge repairs

Post author:Thomas Thoren / For CU-CitizenAccess
Post published:June 5, 2013
Post category:Public Funds

Illinois state inspectors say the bridge carrying traffic on County Highway 50 over Interstate 74 in Mahomet is in “critical condition” and “structurally deficient.” But an average of 2,550 vehicles — including school buses — still use the bridge each day, although the bridge has been reduced to a single traffic lane since August 2011.

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Darrell Hoemann/CU-CitizenAccess.org

A common area for inmates to gather during the day at the Champaign County jail in Downtown Urbana.

Poor conditions in county jails persist as state inspections go unenforced

Post author:Amy Harwath / For CU-CitizenAccess
Post published:May 30, 2013
Post category:Justice

Trash litters the floors of the Edgar County jail, unknown liquid leaks from the ceilings, and broken locks make it impossible to secure internal doors. The Sangamon County Jail is consistently overcrowded, making living quarters unfit for inmates.

Tax Credits/Flickr Creative Commons

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Post category:Article Public Funds

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Jon Worth/Flickr Creative Commons

U.S. Capitol Building

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Post category:Article Public Funds

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Sam Vega/Hoy

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CU-CitizenAccess.org wins 2012 Peter Lisagor Award

Post author:CU-CitizenAccess.org
Post published:May 16, 2013
Post category:Article Immigration

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April Spreeman/Flickr Creative Commons

Cap and gown

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Post author:CU-CitizenAccess.org
Post published:May 8, 2013
Post category:Article

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