Actuarial consultants presented the Village of Lake Bluff’s draft 2025 police pension actuarial valuation to the finance committee on Aug. 25, showing roughly $15 million in market assets against about $26 million in accrued liabilities and recommending an employer contribution of $1.4 million for fiscal 2025.

The presentation, led by actuary Kathy Manning, summarized participant counts, funding-policy methodology and accounting results and noted that “as I understand it, Lake Bluff would like to fund, on the entry age method to 85 per or to 95% funded by 2040.” That target and its amortization method are not in a formal written funding policy, Manning said, which affects how external auditors treat projections beyond 2040.

The valuation showed a funded ratio of about 57.9% on the funding-policy (entry‑age) basis and 57.5% on the statutory (projected unit credit) basis, Manning said. Market assets were reported at roughly $15,000,000 and the accrued liability at about $26,000,000. Member contributions were listed at about $176,000 and total contributions at about $1,600,000, including the employer portion.

Manning explained assumptions that drive the accounting numbers for employers’ financial statements, including a GASB accounting discount rate of 6.63% and an investment return assumption for funding of 6.8%. She described the plan’s amortization approach as a level‑dollar method that, in the current projection, results in contribution amounts that exceed interest on the unfunded liability and helps reduce the unfunded balance over time. She also produced a projection showing contributions trending to roughly $1.4–$1.5 million annually through 2040 under a closed‑group scenario.

Committee members pressed on volatility risks in a small plan, particularly the effect of duty disabilities and individual longevity on liabilities, and on sensitivity to alternative return assumptions. Member Regis asked for a table showing how contribution requirements would change if the assumed rate of return changed by fractions of a percentage point; staff agreed to provide that analysis. Manning and staff also noted an alternative actuarial contribution in the packet that would raise the employer contribution by about $140,000 for the year (to roughly 1.565 on the same scale used in the presentation), and that the police pension board had recommended a lower assumption previously in pursuit of conservatism.

The committee did not adopt a formal funding policy or take a vote on a contribution level at the meeting. Staff said the item will go to the police pension board in September and return to the committee for further discussion and recommendation to the full board.

The valuation packet also included an OPEB (other postemployment benefits) accounting valuation. Manning said OPEB is unfunded for the village and that an increase in the municipal bond (muni) discount rate from about 4.12% to roughly 5.12% lowered the OPEB liability in this year’s accounting results.

The finance committee asked staff for additional sensitivity analyses (different discount/return assumptions) and for the police pension board’s September recommendation to be shared with the committee ahead of any formal action.

Details reported at the meeting will be reflected in forthcoming actuarial and accounting deliverables and in the village’s financial statements once final valuations and any board actions are completed.