There is no question that Chicago's four pension funds -- for police officers, fire fighters, city laborers, and other municipal employees -- are in trouble. The Commission to Strengthen Chicago's Pension Funds April 2010 report (PDF) found that the four funds were funded at just 43 percent of their obligations by the end of 2009. That's a number down from the 83 percent funding level back in 2000. The commission report says the liability can't be canceled out by future economic growth swelling the funds' bottom lines. The Tribune wrote about how the city's funds got to the state they are currently in last November.

Mayoral frontrunner Rahm Emanuel has described the City of Chicago's pension system as "not an honest system" for both pensioners and city taxpayers. He spoke generally about the issue during an interview with Carol Marin on WTTW's Chicago Tonight last November. Here's a clip:

The mayoral frontrunner had not publicly said he would seek pension cuts for current city employees if elected mayor. He did not come out with that position in a questionnaire his campaign submitted to the Tribune editorial board. But he has talked about cuts to current workers in private, the Chicago News Cooperative revealed yesterday. The Cooperative reported that Emanuel told leaders of the city's labor community at a December 15 meeting that existing municipal workers should have smaller pensions, rather than just reduced annuities for new city hires. (Under SB 3538, newly-hired police officers and fire fighters will see their pension benefits capped, among other provisions.)

This is, to say the least, an ominous sign for city employees. Whether or not it serves to push organized labor toward another of the candidates challenging for Mayor Richard Daley's job -- the Chicago Federation of Labor has yet to endorse anyone -- remains to be seen. We'll have to wait until February to get the specifics on Emanuel's pension plan and the coming weeks to see if there is any political fallout for him. But you can bet that current city employees will resist any cuts.

A key point of reference for employees and organized labor will be the State of Illinois' own constitution. It is pretty clear on the question of remaking obligations for existing beneficiaries, a point we have highlighted before in discussing pension changes for state employees. Article VIII, Section 5 of the constitution says that "Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired." To get around that, an Emanuel administration would need to prep for what would likely be a costly court battle. Civic leader Abner Mikva wrote that it is not possible to cut current benefits, too.

Employee benefits, as promised, are in line with with other municipalities, as well, a point the report (PDF) released last spring by the city's Commission to Strengthen Chicago's Pension Funds recognizes. "In general, Chicago's benefits are comparable to those of other cities, with the public safety Funds at the low end and public service Funds near the average of surveyed [defined benefit] plans," the report states.

Anders Lindall, a spokesman for the American Federation of State, County, and Municipal Employees Council 31, wrote in an e-mail that AFSCME members drawing from the Municipal Employee fund can expect an annual average pension of about $29,000. And unlike workers in the private sector, they do not pay into Social Security but instead contribute 8.5 percent of each paycheck toward their own retirement. (Other city workers pay up to 9.125 percent into their plans and they, like AFSCME members, don't pay into Social Security.)

"City employees teach our kids, plow our snow, and patrol our streets. They pick up trash, fight fires and keep our drinking water clean," Lindall wrote. "They work in our health clinics, libraries and almost everywhere else you look in our neighborhoods. These working men and women are both city taxpayers and devoted public servants."

For more information about the city benefit levels, check out the the last row in the following table from the April 2010 pension commission report. It lists the average size of the pensions granted in 2007 to men and women retiring with an annuity due from the Laborers' and Retirement Board Employees Fund (LABF); men and women retiring out of the Municipal Employees', Officers', And Officials' Annuity and Benefit Fund (MEABF); those retiring with a Firemen's Annuity and Benefit Fund (FABF) and the Policemen's Annuity and Benefit Fund (PABF) pension:

The city's police officers and firefighters earn more than other city employees upon their retirement, as you might expect. Tribune columnist John McCarron's recent piece about the allegedly "lavish" pensions Chicago firefighters and other city workers get is worth quoting at length in this regard:

Chicago firefighters Edward Stringer and Corey Ankum will never get to enjoy their retirements or their defined-benefit pensions. Their lives were cut short last Wednesday morning after they dashed into a fire-compromised building on the South Side to look for survivors, only to become victims themselves when a truss roof collapsed. More than a dozen other firemen were injured, two seriously.

Stringer and Ankum died as heroes, and the collective heart of Chicagoland goes out to their families. Ankum was a father of three, including a 1-year-old. Stringer was older, divorced with a grown daughter. He liked to ride his motorcycle, walk his beagle Roscoe and, when the need arose, mow his neighbor's lawn and shovel her walkway.

Point is, the biggest problem I had last Wednesday, besides writing this column, was finding the bad bulb on a dysfunctional string of Christmas tree lights. How about you? Were you hustling to get a year-end report written before Christmas break? Or wading through shoppers at Oakbrook Centre looking for that perfect something for a certain someone?

Fact is, most of us don't have to dash into a still-smoldering building by dawn's early light to see if there's someone lying lifeless in the black soot. Or, for that matter, approach a darkened automobile pulled over on the shoulder of a lonely expressway at 3 in the morning.

The News Cooperative noted that none of the other major mayoral contenders -- Gery Chico, Carol Moseley Braun, and Miguel del Valle -- support cutting pensions for existing employees.

Del Valle, who was a member of the city's pension commission, criticized Emanuel's position today, calling cuts lacking in "both conscience and creativity." He said he would be open to privatizing Midway Airport as long as an unspecified percentage of the outsourcing goes toward the pension plans.

“Tough talk against city employees may win political points in the press, but it does nothing to secure our employees’ retirements," del Valle said in a press statement. "We need to consider all our options before cutting essential obligations to workers.”

Lindall, from AFSCME, reiterated that the unfunded pension liabilities are debts. "It can’t be wished away or redefined out of existence. And like any other debt, the longer one waits to pay, the more costly it becomes. The city must have a plan to pay it off," he wrote.