Prospect Heights officials were told Monday that the village should budget $1,617,596 next year for the police pension fund as part of an actuarial valuation intended to reduce the plan's unfunded liability.

Todd Schroeder of Lauterbach and Amen presented the valuation at the Nov. 10 Village Council meeting, saying the recommended contribution is about 2% higher than the previous year. "It's a million 617,596," Schroeder said when summarizing the top-line recommendation. He said investment returns and higher-than-expected contributions this year reduced the increase that otherwise would have been larger.

The report showed the fund was approximately 75% funded at the end of the fiscal year, with an unfunded liability of roughly $9 million. Schroeder said the recommended contribution is composed of a regular annual contribution (about $346,004) plus a payment toward the unfunded liability intended to amortize the shortfall over time.

Bill Kearns, a current member of the Police Pension Board who introduced the presentation, noted a recent one-time $2 million payment will increase the funded percentage immediately; Schroeder said the actuarial recognition of that payment reduces liability right away while changes to cash-flow contributions will be smoothed over a 15-year period per fund policy.

Following the actuarial presentation, the council reappointed Bill Kearns to another term on the Police Pension Board. Kearns said he was "absolutely" willing to continue serving. Council members moved, seconded and approved the reappointment by unanimous roll-call vote.

The actuarial presentation flagged projected increases in annual benefit payouts: current annual benefit payments are near $1.7 million, and Schroeder estimated payouts could reach between $2.1 million and $2.2 million in five years and between $2.5 million and $2.6 million in 10 years, figures the firm uses when setting contribution recommendations.

The council did not take additional action on the valuation beyond the reappointment; staff and the pension board will carry the funding recommendation forward into the city budgeting process.