CTPF funds pensions through revenue returned on investments and four external sources:
- the Chicago Board of Education/charter schools
- the State of Illinois
- property tax levy
- member contributions
External Sources Update
Legislation passed in 2016 and 2017 reestablished a dedicated tax levy for CTPF, reformed the Illinois education funding formula, established the State’s obligation to fund the normal cost of Chicago’s teacher pensions, and provided funding to offset the cost of retiree health insurance.
This landmark legislation initiated the correction of decades of revenue loss, and set CTPF on a solid path of diverse, stable, and equitable funding, ensuring that Chicago’s educators can retire with dignity and security.
A snapshot of funding received to date for FY 2020 includes:
$442 million* in property tax receipts
$257 million from the State of Illinois for normal costs, retiree health insurance and other required contributions
$170 million from employee and employer contributions
$94 million from the Chicago Board of Education (CPS)
$24 million from Charter Schools
*A balance due of $52 million in property tax receipts is expected.
Investment Returns*
CTPF invests for the long-term, consistent with the Fund’s asset allocation policy. CTPF ended the fiscal year on June 30, 2020, with an approximate total value of $10.7 billion, essentially flat from the previous year, after paying out nearly $1.5 billion in pension and health insurance benefits. These numbers are preliminary and will undergo an independent review by the Fund’s auditor this fall.
Investment returns as of June 30, 2020
| Net Rate of Return | Total Fund Benchmarks | |
| 1 Year | 4.20% | 3.48% |
| 3 Years | 6.03% | 6.04% |
| 5 Years | 6.25% | 6.28% |
| 10 Years | 8.82% | 8.59% |
| 25 Years | 7.52% | 7.18% |
With the current volatility in the financial markets, members may be concerned about the security of their pension. CTPF pensions are secure. When members vest, they qualify for a lifetime pension, guaranteed by the Illinois Constitution. Pensions are determined by a formula, and do not change with market conditions.
CTPF utilizes professional fund managers to implement the Fund’s investment policy, designed to obtain the highest expected return on investments with an acceptable level of risk. While market volatility may be upsetting, it’s important to recognize that CTPF invests prudently in a diversified portfolio designed to weather market volatility over the long term. Adherence to an appropriate and well-defined asset allocation policy remains the best course of action to manage the path to the successful attainment of long-term investment goals.
Funded Ratio
CTPF's funded ratio for the 2019 fiscal year was is 47.5%. The current volatility in the markets does not have an immediate impact on CTPF’s funded status. CTPF’s funded status is calculated by the Fund’s actuary once a year using data as of June 30. The next Actuarial analysis will take place this fall, and the results of that study will be posted when available.