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Actuarial report: Rockford police, fire pension funds about half-funded; council warned of rising contributions
Summary
An actuarial consultant told the council the police plan is about 50.6% funded and the fire plan just under 43%, with combined unfunded liabilities approaching $500 million and near-term contribution increases driven by amortization and payroll-growth assumptions.
City-hired actuarial consultant Jen Turk presented the 2026 valuations for Rockford—s police and fire pension plans and described how market gains, actuarial smoothing, demographic shifts and payroll assumptions affect funding measures.
Turk said the plans experienced roughly a 17% market return, but the actuarial 'smoothed' value recognizes only a portion of that gain annually. She reported the fire plan funding percentage rose to just under 43% and the police plan was about 50.6% funded. Turk highlighted that increasing active counts and earlier-than-expected retirements raise liabilities and that lowering the payroll-growth assumption increases near-term required contributions to meet the statutory amortization goal.
During an extended Q&A, staff and aldermen discussed contribution projections, administrative and investment fees, and the statutory target to reach 90% funding by 2040. City staff said the police unfunded liability is listed at $236,000,000 and the fire unfunded liability at $254,000,000, totaling just under $500,000,000, and explained that the city must amortize a large portion of that balance by the statutory target, which drives projected contribution increases.
Alderman Beach warned that pension payments could consume an increasing share of property-tax revenue and said the council must weigh service reductions and revenue options. "Perhaps within three years every dollar that this city collects in personal property tax... will go to pay this pension," he said, urging attention to long-term fiscal planning. Staff said the city has sometimes made supplemental contributions (noting a $1 million contribution in a recent year) and that models can be produced to show the effect of continuing that strategy.
The presentation concluded with staff offering to provide historical trend charts and model projections showing the impact of the casino-funded $1 million annual contribution to each fund on the unfunded-liability trajectory.
