The passive investing, which generally works equally well for personal investing including 401ks, almost always outperforms active managers. I suppose some small allocation might be made to private equity funds or alternative investments but those seem like a political 3rd rail to me and come with plenty of risk.
To me, it looks like the active managers are part of the stationary bandits that weigh Chicago down so very much.
Talking about following this stuff for 2 years, I've been ragging on Chicago pensions since about 2008/2009. ;)
But it does build up over time, just as the contributions they didn't make starting 20+ years ago.
Everybody does try to get around having to make higher contributions, but alas, using anything less than a 100% target, and continuing to use iffy valuation assumptions means... yeah, they're almost definitely going to have to make higher contributions than currently scheduled. Even before those police/fire pension sweeteners.
If you got rid of the 80 different investment firms handling the city's money where would all those incompetent family members, related to Chicago's politicians, go for work? Especially since the cushy jobs at Commonwealth Edison are no more (for a year or two).
> For the coming year, our total normal cost across the four funds is around $438 million. Because we’re tremendously underfunded, the city instead is statutorily required to pay roughly $2.6 billion into the funds.
Conor, out of curiosity, how exactly did you get to these numbers? My eyes hurt from looking at the ACFR and I'm no closer to figuring it out.
The passive investing, which generally works equally well for personal investing including 401ks, almost always outperforms active managers. I suppose some small allocation might be made to private equity funds or alternative investments but those seem like a political 3rd rail to me and come with plenty of risk.
To me, it looks like the active managers are part of the stationary bandits that weigh Chicago down so very much.
Keep it up!
Talking about following this stuff for 2 years, I've been ragging on Chicago pensions since about 2008/2009. ;)
But it does build up over time, just as the contributions they didn't make starting 20+ years ago.
Everybody does try to get around having to make higher contributions, but alas, using anything less than a 100% target, and continuing to use iffy valuation assumptions means... yeah, they're almost definitely going to have to make higher contributions than currently scheduled. Even before those police/fire pension sweeteners.
If you got rid of the 80 different investment firms handling the city's money where would all those incompetent family members, related to Chicago's politicians, go for work? Especially since the cushy jobs at Commonwealth Edison are no more (for a year or two).
> For the coming year, our total normal cost across the four funds is around $438 million. Because we’re tremendously underfunded, the city instead is statutorily required to pay roughly $2.6 billion into the funds.
Conor, out of curiosity, how exactly did you get to these numbers? My eyes hurt from looking at the ACFR and I'm no closer to figuring it out.
Hey! You can't pull this from the city's ACFR; you go to the four funds' individual reports. Using Fire as an example: (link here: https://fabf.org/LinkClick.aspx?fileticket=jV_Lyqzt8tk%3d&portalid=0)
- PDF page 27 / doc page 23 has a table, 'Actuarially Determined Contribution'
- Line 5 is the Employer Normal Cost, adjusted for timing, and is $72,769,180 for 2025.
- You can grab similar numbers from the other funds and our total comes to around $438mm for 2025.
Got it. Thanks so much!