Actuarial report: Kankakee police and fire pension funds boosted to roughly 90% funded after bond proceeds

Lauterbach & Amon presented the city’s annual actuarial valuations for the police and fire pension funds and recommended a combined contribution of about $3.3 million for the current year, a marked decline from the prior year driven largely by proceeds from pension obligation bonds.

Todd Schroeder, the firm’s actuarial services lead, told the council the recommended contribution represents the normal cost for active members plus a payment toward unfunded liabilities. “We’re looking at a recommended contribution for the current year of about $3,300,000,” Schroeder said. He said the bond proceeds paid down a large portion of prior unfunded liability and produced a 57% year-over-year decrease in the recommended contribution.

Schroeder said the funds are now roughly 90% funded, with an estimated remaining unfunded liability in the neighborhood of $17–$70 million depending on accounting line items reported (the presentation listed roughly $70 million in unfunded liability before bond proceeds and noted a substantial reduction after the POBs). Schroeder highlighted that the payment profile shifted: previously, unfunded-liability payments dominated the required contribution; after the bond transaction, the cost of active members accounts for a larger share of the annual recommendation.

Council members asked whether the valuation and contribution guidance were based on paying 100% of unfunded liability; Schroeder confirmed the primary recommendation was structured to amortize the full remaining liability. He also explained the state’s alternative—meeting statutory minimums—would follow a plan that reaches 90% funding by February 2040, which Schroeder said some municipalities choose but which Lauterbach & Amon did not recommend as the city’s primary approach.

The presentation included projections of benefit payments (roughly $8.7 million annually today across both funds, rising to $12–$13 million over 10 years), five-year smoothing of investment returns and risk metrics showing benefit outflows as a percent of assets below preferred thresholds. Schroeder said last year’s alarm about assets not covering inactive liabilities had been resolved by the bond proceeds; he told the council, “That comment is now gone.”

City staff said the actuarial figures were used to prepare the levy and that the improved funded status was an important outcome of recent financing decisions. The council did not take a formal vote on the actuarial report at the meeting; the presentation informed budget and levy actions recorded elsewhere in the city’s fiscal process.