>>> TODAY WAS THE DEADLINE FOR

CHICAGO PUBLIC SCHOOLS TO MAKE

$634 MILLION PAYMENT TO THE

CHICAGO TEACHERS PENSION FUND

AND LATE THIS AFTERNOON IT WAS

MADE.

THE SCHOOL FINANCES REMAIN IN A

PERILOUS STATE, SO WHAT HAPPENS

NEXT?

HERE TO HELP US ANSWER THAT

QUESTION IS CHARLES BURBRIDGE,

THE EXECUTIVE DIRECTOR OF THE

CHICAGO TEACHERS PENSION FUND,

NAMED IN FEBRUARY.

AND FROM 1995 TO 2000 DEPUTY

CHIEF FINANCIAL OFFICE FOR

CHICAGO PUBLIC SCHOOLS AND

TWELVE YEARS WITH THE FISCAL

COMMISSION AND CURRENT TO TAKING

UP HIS CURRENT POSITION HE WAS

CHIEF FINANCIAL OFFICER OF THE

ATLANTA PUBLIC SCHOOLS.

CHARLES BURBRIDGE, WELCOME TO

"CHICAGO TONIGHT."

YOU CLEARLY ARE WELL VERSED IN

ALL ISSUES OF FINANCES.

IT IS NOT EVERY DAY THAT YOU GET

WHAT YOU ARE HOLDING.

LET'S LOOK AT THIS.

I WILL HOLD THAT UP.

TELL ME WHAT WE ARE LOOKING AT?

>> CHECKS THAT I RECEIVED ABOUT

5:20 TONIGHT, PAYMENT WE

RECEIVED FROM CHICAGO PUBLIC

SCHOOLS FOR THE PENSION THAT WAS

DUE TODAY.

>> I SEE IT YES, THE AMOUNT IS?

>> $99 MILLION.

THEIR CHECK WRITING CAPACITY IS

LIMITED TO A HUNDRED MILLION, SO

WE HAD TO MAKE MULTIPLE CHECKS

TO GET TO THE DOLLAR AMOUNT.

>> HAVE THEY BEEN DEPOSITED?

>> WE DID DEPOSIT THEM TONIGHT.

>> DID YOU TAKE A PICTURE?

>> IT IS NOT LIKE WITH AN

i-PHONE BUT WE HAVE REMOTE

DEPOSIT CAPABILITIES AND WE

SCANNED AND DEPOSITED THEM WHEN

WE RECEIVED THEM.

>> WE HEARD YOU GOT THEM WITHIN

THE PAST 90 MINUTES.

ABOUT AN HOUR AND A HALF AGO.

DOES THIS MEAN THAT EVERYTHING

IS FINE, YOU GOT THE PAYMENT

THAT YOU NEEDED FOR NOW, SO NOW

WHAT?

>> THIS IS JUST ONE STEP IN A

VERY LONG, THINGS TO BE

PROTRACTED ACTIONS ON THE PART

OF THE GENERAL ASSEMBLY AND

SCHOOL DISTRICT.

BY NO MEANS ENDS THE DISCUSSION

OF HOW PENSIONS ARE FUNDED FOR

TEACHERS AT CHICAGO PUBLIC

SCHOOLS.

JUST THE START OF IT.

>> DO YOU HAVE ANY IDEAS WHERE

THE FUNDS CAME FROM?

>> WE DON'T HAVE INSIGHT AS TO

HOW THEY CAME UP WITH THE MONEY.

>> YOU JUST WANT TO MAKE SURE

THEY DON'T BOUNCE?

>> WE WANT TO MAKE SURE THE

CHECKSES DON'T BOUNCE.

>> THERE IS SOME THINKING IT

CAME FROM THE $1 BILLION-PLUS

THAT THE MAYOR WAS TALKING

ABOUT.

>> IT COULD HAVE.

CLEARLY THEY HAVE TO MANGE THEIR

CASH FLOWS AND BUDGETS.

>> THE SOURCE OF THE INCOME, THE

SOURCE OF THE PAYMENTS MAINLY TO

THAN SURE THAT PAYMENT WAS

FORTHCOMING.

>> THAT IS THE FIRST STEP MAKE

SURE THEY ARE COMING.

WE ARE INTERESTED IN HAPPENINGER

TERM ABOUT EDUCATION FUNDING,

BECAUSE THERE IS REALLY NO

PENSION FUNDING SOLUTION WITHOUT

EDUCATION FUNDING SOLUTION.

BECAUSE THE TEACHERS SHOULDN'T

HAVE TO CHOSE BETWEEN TEACHER

SECURITY TOTE AND RETIREMENT

SECURITY TOMORROW.

WE ARE INTERESTED IN THE

DISCUSSION AND ENSURING THAT IT

FOES IN THE DIRECTION THAT

SUPPORTS THE INTERESTS OF OUR

MEMBERS.

AND TRUSTEES ARE REALLY, THE

BOARD PRESIDENT, WE CALLED FOR A

MEETING TOMORROW, AND WE WILL

STILL HAVE IT TO DISCUSS PENSION

FUNDING AND LONGER TERM INTEREST

OF THE MEMBERS.

>> THAT MEETING WAS ORIGINALLY

SCHEDULED TO DISCUSS WHAT WOULD

HAPPEN IF YOU DIDN'T RECEIVE THE

PAYMENT SNMPLT WE WERE

CAUTIONARY, AND) WUT IT ON THE

AGENDA.

YOU A NOW WE WILL USE IT TO HAVE

OTHER DISCUSSIONS ABOUT PENDS

FUNDING.

>> LET'S LOOK AT CHARTS THAT

SUMMARIZE THE HISTORY OF PENSION

FUNDING FOR OUR TEACHERS.

AND WHAT ARE WE LOOKING AT HERE,

BORT CONTRIBUTIONS?

>> THIS CHART SHOWS BOARD

CONTRIBUTIONS.

THERE IS TWO BARS, FOR EACH YEAR

THAT IS REPRESENTED AND THAT

STARTS FROM 2004 TO 2014, AND IT

SHOWS THAT EXPERTS DETERMINE

WHAT AN EMPLOYER SHOULD BE

CONTRIBUTING TO A PENSION FUND.

THE LONG BARS.

>> LIGHTER GREEN ONES.

>> THE SHORTER ARE WHAT THE

SCHOOL DISTRICT HAS BEEN

STATUTORYLY REQUIRED TO

CONTRIBUTE, AND SO THERE IS A

SHORT FALL BETWEEN WHAT SCHOOL

DISTRICT HAS BEEN CONTRIBUTING

AND WHAT THE SCHOOL DISTRICT

SHOULD BE CONTRACTING ACCORDING

TO THE EXPERTS.

AND THE NEXT CHART IS FUNDING

HISTORY.

EXPLAIN THIS ONE FOR US?

>> ONE OF THE MEASURES OF

PENSION FUND HELP IS THE FUNDED

RATIO.

TYPICALLY YOU LOOK FOR FUNDED

RATIOS, YOU SHOULD BE A HUNDRED

PERCENT FUNDED.

THAT IS THE BOTTOM LINE.

WHAT THIS SHOWS IS IN 2001, WE

WERE IN FACT BASICALLY A HUNDRED

PERCENT FUNDED.

NOT THAT LONG AGO.

IN THE SCHEME OF THINGS.

WHEN YOU THINK ABOUT THE PENSION

FUND.

WE HAVE BEEN AROUND 120 YEARS.

TOMORROW IS OUR 120th

ANNIVERSARY.

PENSION FUNDS IS LOOKING AT LONG

HORIZONS.

IN THE GREAT SCHEME OF THINGS

NOT THAT LONG AGO WE WERE A

HUNDRED PERCENT FUNDED.

>> CAN WE SEE THAT CHART ONE

MORE TIME?

>> PRIMARILY WHEN YOU THINK OF

THE GAPS BETWEEN THE LONG BARS

AND SHORT BARS, THESE

UNDERFUNDING CONTRIBUTED TO THE

EROSION OF THE FUNDED RATIO, OUR

FUNDING CONDITION.

>> YOU ARE FUNDED NOW AT ABOUT

50%.

WHAT TO EXPERTS OR PENSION

EXPERTS SAY IS SORT OF LIKE THE

MINIMUM YOU SHOULD HAVE IN TERMS

OF FUNDING.

>> THERE IS SOME RULES OF THUMB.

80% IS ONE RULE THAT PEOPLE PUT

OUT THERE.

IT IS NOT ACTUARIAL SCIENCE.

THE RULE OF IF YOU ARE ABOVE 80%

YOU ARE HEALTHY, AND WHEN YOU

THINK ABOUT YOUR OWN SAVINGS

PLANS THERE IS NO SUCH THING AS

HAVING TOO MUCH MONEY.

YOU WILL SEE SOME FUNDS IN

EXCESS, 120% IS NOT UNUSUAL, YOU

REALLY NEED TO HAVE MONEY SAVED

UP FOR BAD DAYS.

YOU KNOW, THE RETURNS ON

INVESTMENTS ARE NOT CONSTANT.

GOOD RETURNS IN THE MARKETS AND

PAD RETURNS, SO YOU REALLY ARE

TRYING TO MAXIMUM MIZE AND NO

SUCH THING AS TOO MUCH MONEY BUT

A HUNDRED PERCENT IS THE TARGET.

WHAT CHANGE IS NEEDED TO BE SURE

THAT FUTURE CHARTS, SHOW A

GREATER HEALTH ON THE PART OF

THE PENSION FUND.

>> STRONGER CONTRIBUTIONS AND

HER CONSISTENT ON THE PART OF

THE BOARD.

HOW DO YOU ENSURE THAT?

>> YOU NAMED IT.

THEY SHOULD BE CONSISTENT LIKE

YOU ARE DOING YOUR OWN MONTHLY

SAVINGS PLAN, THEY NEED TO COME

IN ON A MONTHLY BASIS.

A AND THEY NEED TO GUARANTEED.

WHEN YOU LOOK AT ILLINOIS

PENSION PLANS, EVEN WITHIN THE

STATE, LOOKING AT THE DIFFERENCE

BETWEEN THE ILLINOIS AND

MACHINES PLANS, VERSUS SOME OF

THE OTHER PLANS, THE DIFFERENCE

IS THE MUNICIPALITIES IN THE

STATE OUTSIDE THE CITY OF

CHICAGO ARE REQUIRED TO MAKE

PENSION CONTRIBUTIONS.

YOU LOOK AT GEORGIA, AND

CALIFORNIA, PENSION CONTRIBUTES

ARE MANDATORY.

SOCIAL SECURITY CONTRIBUTES ARE

MANDATORY.

YOU DON'T GET TO TAKE HOLIDAYS

FROM SOCIAL SECURITY PAYMENTS AS

AN EMPLOYER.

AND SO FOR OUR TEACHERS YOU HAVE

TO FUND STAND THEY DIDN'T

CONTRIBUTE TO SURVEILLANCE

VIDEO, THAT IS OUR SOCIAL

SECURITY, AND MANDATORY PAYMENTS

GUARANTEED, MONTHLY PAYMENTS,

THESE ARE CRITICAL ELEMENTS OF A