What a shame, yet another Democrat off to a well deserved vacation
at the Gray Bar Hotel.

At the taxpayers expense, of course.

Here is some more information regarding a felony conviction resulting in the loss of the Illinois public sector pension.

There are actually some exceptions to the rule (which do not apply to this case).

To explain, each of the 20 pension systems in Illinois has its own rules about losing a pension as a result of a crime.

In general, a felony conviction related to the job results in the loss of the pension.

More specifically, employees in the Cook County Recorders office participate in whats commonly known as the Cook County Fund.

It’s technical name is the, “County Employees’ and Officers’ Annuity and Benefit Fund – Counties Over 3,000,000 Inhabitants.”

It is Article 9 of the Illinois Pension Code.

The laws are consolidated in the Illinois Compiled Statutes (ILCS).

http://www.ilga.gov > Complied Statutes > Chapter 40 Pensions > 40 ILCS 5/ Illinois Pension Code > Article 9 – County Employees’ and Officers’ Annuity and Benefit Fund – Counties Over 3,000,000 Inhabitants.

The exact wording of the law is:

“None of the benefits provided in this Article shall be paid to any person who is convicted of any felony relating to or arising out of or in connection with his service as an employee.”

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So one might wonder, how well funded is the Cook County Pension Fund.

It’s in miserable financial shape, as most public sector pension funds in Illinois.

As of Fiscal Year Ending December 31, 2014, the taxpayer IOU to the fund (unfunded liability) was $6,250,391,908.

That’s $6.2 Billion Dollars that should have been in the fund as of Fiscal Year 2014, but was not.

One big problem with that, is investment returns are supposed to be the biggest “contributor” to this pension fund, not employee or employer contributions.

So guess who gets stuck with the investment shortfall due to no investment returns on the $7.1 Billion – the taxpayers (employer) get stuck with the entire tab, the employee gets stuck with zero.

But the employees keep getting their pay raises.

And legislators and Governors kept hiking the benefits.

And the unions and public sector employees blame the employer for not contributing enough money to the pension fund.

If the benefits were never hiked, if the pay hikes were more reasonable, the pensions would be 100% funded.

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Illinois Department of Insurance
Public Pension Division
2015 Biennial Report (covering years 2013 & 2014)
Released October 1, 2015 to Governor Bruce Rauner and the Illinois General Assembly

Cook County Pension Fund
Fiscal Year Ending December 31, 2014
Net Present Assets $9,068,398,780 (value of investments in the fund as of that date)
Actuarial Total Liability $15,318,790,688 (amount actuaries calculate should be in the fund)
Unfunded Liability $6,250,391,908 (amount that should be in the fund but is not)
Percent funded 59.20%
Active Participants 21,656 (employees contributing to the fund)
Beneficiaries 17,076 (retirees drawing a pension)
Average Salary $69,937 (unstated is average years worked, full time equivalent aka percent of full time, average number of hours worked per day, and average number of weeks worked per year)

The Cook County Fund has two tiers, as do most of the public sector pension funds in Illinois.

Tier I (Tier 1) and Tier II (Tier 2 is those beginning their career on or after January 1, 2011).

Tier 1 does not have a maximum salary cap; Tier 2 does have a maximum salary cap, and as of FY 2014 it was $110,631.

The accrual rate is 2.4% per year of service.

As a comparison, TRS, the teachers and administrators outside of Chicago, has an accrual rate of 2.2%.

Here is how it the accrual rate is used to calculate the starting pension.

The accrual rate is multiplied by years of service (years of service is usually more than years worked in most of the public sector pension systems in Illinois); the result which is multiplied by a final average salary to arrive at starting pension.

Maximum annuity is 80% of final average salary (once again for comparison, TRS has a maximum of 75%.

In other words, the accrual rate x years of service cannot exceed 80%.

And, the starting pension is 80% of final average salary.

If the annuitant dies the spouse and child receives pension benefits (of course there’s various rules about that).

In the case of occupational disability, the pension is 75%, or 50% for a pre-existing condition.

There is a non occupational disability benefit of 50%.

Most employees contribute 8.5% to the pension fund (not sure if there are any pension pick-ups by the employer of any of the employee’s contributions).

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Next let’s look at how contributions & investment gains, and the offsetting benefits paid and cost to administer the plan, are chipping away (or not) at the $6,250,391,908 unfunded liability (taxpayer IOU).

Additions 2014
Employer contributions $190,032,872
Employee contributions $129,325,318
Investment gain $488,890,897
Total $808,249,087.
For whatever reason the 2014 CAFR stated total additions were $817,991,149 (we’ll call that a mystery total), not $808,249,087.

Now let’s look at how much was paid out to pensioners and the cost to administer the plan.

Deductions 2014
Benefits paid out $645,601,458
Refunds $26,347,361
Cost to administer the plan $5,010,206
Total $676,959,025

So, additions of $817,991,149 or $808,249,087, and deductions of $676,959,025.

818,991,149 – $676,959,025 = $142,032,121 net additions (mystery total)
808,249,087 – $676,959,025 = $131,291,062 net additions (add up subtotals)

$142,032,121 / $6,250,391,908 = 2.3%
$131,291,062 / $6,250,391,908 = 2.1%

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From the FY 2014 CAFR, the county’s payroll for employees covered by the Plan for 2014 was $1,514,550,023.

$1,514,550,023 / $6,250,391,908 = 24%.

That would be current payroll / unfunded liability.

It would take roughly 4 years of current payroll (don’t pay employees for 4 years, just contribute to their pension plan) to pay down the unfunded liability.

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Another aspect of this pension fund, and not sure if it’s reflected above, is that there is a retiree healthcare component of the plan.

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Bottom line, Cook County taxpayers owe $6.2 billion to the Cook County pension fund, courtesy of all the legislative benefit hikes by legislators and Governors, and salary hikes approved by the boards.

Not that we condone accepting a $200 cash bribe for a phony real estate deed, but that costs taxpayers a lot less than $6.2 billion to fund pensions.

This kinda corruption goes on 24/7 in Cook County and all the rest of the Illinois Counties.

Putting these people behind bars is no deterrent.

How many Illinois Governors have been convicted and it looks like Pritzker is next.

Just another Crook.