It would be the first time since the payment policy took effect in 2023 that the city isn’t planning to pay the full amount in January. The move underscores the financial stress that Chicago is facing. Local property tax distributions from Cook County have arrived late and the city’s expenses including for labor, pensions and material continue to rise.
Three years ago, former Mayor Lori Lightfoot had implemented the advance pension payment policy to reduce interest costs on the city’s large unfunded pension liability. Between 2023 and 2025, the city contributed $820.5 million in advance pension payments, according to budget documents.
The payments, separate from the required annual contributions that Chicago needs to make to the retirement systems, help curb future costs and serve as a supplement to the mandated contributions. The city’s goal is to bring its pensions to 90% funded in the next three decades. Chicago’s required pension contribution tops $2 billion annually, accounting for about 38% of revenue.
Johnson had proposed a roughly $120 million advance pension payment for this year. A number that a bloc of aldermen decried.