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>>> TODAY WAS THE DEADLINE FOR

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CHICAGO PUBLIC SCHOOLS TO MAKE

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$634 MILLION PAYMENT TO THE

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CHICAGO TEACHERS PENSION FUND

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AND LATE THIS AFTERNOON IT WAS

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MADE.

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THE SCHOOL FINANCES REMAIN IN A

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PERILOUS STATE, SO WHAT HAPPENS

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NEXT?

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HERE TO HELP US ANSWER THAT

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QUESTION IS CHARLES BURBRIDGE,

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THE EXECUTIVE DIRECTOR OF THE

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CHICAGO TEACHERS PENSION FUND,

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NAMED IN FEBRUARY.

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AND FROM 1995 TO 2000 DEPUTY

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CHIEF FINANCIAL OFFICE FOR

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CHICAGO PUBLIC SCHOOLS AND

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TWELVE YEARS WITH THE FISCAL

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COMMISSION AND CURRENT TO TAKING

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UP HIS CURRENT POSITION HE WAS

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CHIEF FINANCIAL OFFICER OF THE

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ATLANTA PUBLIC SCHOOLS.

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CHARLES BURBRIDGE, WELCOME TO

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"CHICAGO TONIGHT."

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YOU CLEARLY ARE WELL VERSED IN

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ALL ISSUES OF FINANCES.

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IT IS NOT EVERY DAY THAT YOU GET

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WHAT YOU ARE HOLDING.

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LET'S LOOK AT THIS.

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I WILL HOLD THAT UP.

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TELL ME WHAT WE ARE LOOKING AT?

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>> CHECKS THAT I RECEIVED ABOUT

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5:20 TONIGHT, PAYMENT WE

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RECEIVED FROM CHICAGO PUBLIC

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SCHOOLS FOR THE PENSION THAT WAS

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DUE TODAY.

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>> I SEE IT YES, THE AMOUNT IS?

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>> $99 MILLION.

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THEIR CHECK WRITING CAPACITY IS

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LIMITED TO A HUNDRED MILLION, SO

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WE HAD TO MAKE MULTIPLE CHECKS

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TO GET TO THE DOLLAR AMOUNT.

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>> HAVE THEY BEEN DEPOSITED?

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>> WE DID DEPOSIT THEM TONIGHT.

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>> DID YOU TAKE A PICTURE?

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>> IT IS NOT LIKE WITH AN

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i-PHONE BUT WE HAVE REMOTE

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DEPOSIT CAPABILITIES AND WE

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SCANNED AND DEPOSITED THEM WHEN

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WE RECEIVED THEM.

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>> WE HEARD YOU GOT THEM WITHIN

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THE PAST 90 MINUTES.

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ABOUT AN HOUR AND A HALF AGO.

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DOES THIS MEAN THAT EVERYTHING

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IS FINE, YOU GOT THE PAYMENT

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THAT YOU NEEDED FOR NOW, SO NOW

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WHAT?

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>> THIS IS JUST ONE STEP IN A

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VERY LONG, THINGS TO BE

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PROTRACTED ACTIONS ON THE PART

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OF THE GENERAL ASSEMBLY AND

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SCHOOL DISTRICT.

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BY NO MEANS ENDS THE DISCUSSION

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OF HOW PENSIONS ARE FUNDED FOR

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TEACHERS AT CHICAGO PUBLIC

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SCHOOLS.

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JUST THE START OF IT.

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>> DO YOU HAVE ANY IDEAS WHERE

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THE FUNDS CAME FROM?

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>> WE DON'T HAVE INSIGHT AS TO

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HOW THEY CAME UP WITH THE MONEY.

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>> YOU JUST WANT TO MAKE SURE

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THEY DON'T BOUNCE?

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>> WE WANT TO MAKE SURE THE

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CHECKSES DON'T BOUNCE.

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>> THERE IS SOME THINKING IT

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CAME FROM THE $1 BILLION-PLUS

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THAT THE MAYOR WAS TALKING

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ABOUT.

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>> IT COULD HAVE.

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CLEARLY THEY HAVE TO MANGE THEIR

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CASH FLOWS AND BUDGETS.

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>> THE SOURCE OF THE INCOME, THE

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SOURCE OF THE PAYMENTS MAINLY TO

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THAN SURE THAT PAYMENT WAS

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FORTHCOMING.

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>> THAT IS THE FIRST STEP MAKE

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SURE THEY ARE COMING.

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WE ARE INTERESTED IN HAPPENINGER

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TERM ABOUT EDUCATION FUNDING,

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BECAUSE THERE IS REALLY NO

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PENSION FUNDING SOLUTION WITHOUT

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EDUCATION FUNDING SOLUTION.

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BECAUSE THE TEACHERS SHOULDN'T

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HAVE TO CHOSE BETWEEN TEACHER

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SECURITY TOTE AND RETIREMENT

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SECURITY TOMORROW.

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WE ARE INTERESTED IN THE

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DISCUSSION AND ENSURING THAT IT

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FOES IN THE DIRECTION THAT

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SUPPORTS THE INTERESTS OF OUR

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MEMBERS.

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AND TRUSTEES ARE REALLY, THE

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BOARD PRESIDENT, WE CALLED FOR A

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MEETING TOMORROW, AND WE WILL

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STILL HAVE IT TO DISCUSS PENSION

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FUNDING AND LONGER TERM INTEREST

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OF THE MEMBERS.

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>> THAT MEETING WAS ORIGINALLY

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SCHEDULED TO DISCUSS WHAT WOULD

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HAPPEN IF YOU DIDN'T RECEIVE THE

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PAYMENT SNMPLT WE WERE

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CAUTIONARY, AND) WUT IT ON THE

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AGENDA.

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YOU A NOW WE WILL USE IT TO HAVE

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OTHER DISCUSSIONS ABOUT PENDS

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FUNDING.

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>> LET'S LOOK AT CHARTS THAT

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SUMMARIZE THE HISTORY OF PENSION

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FUNDING FOR OUR TEACHERS.

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AND WHAT ARE WE LOOKING AT HERE,

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BORT CONTRIBUTIONS?

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>> THIS CHART SHOWS BOARD

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CONTRIBUTIONS.

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THERE IS TWO BARS, FOR EACH YEAR

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THAT IS REPRESENTED AND THAT

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STARTS FROM 2004 TO 2014, AND IT

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SHOWS THAT EXPERTS DETERMINE

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WHAT AN EMPLOYER SHOULD BE

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CONTRIBUTING TO A PENSION FUND.

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THE LONG BARS.

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>> LIGHTER GREEN ONES.

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>> THE SHORTER ARE WHAT THE

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SCHOOL DISTRICT HAS BEEN

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STATUTORYLY REQUIRED TO

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CONTRIBUTE, AND SO THERE IS A

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SHORT FALL BETWEEN WHAT SCHOOL

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DISTRICT HAS BEEN CONTRIBUTING

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AND WHAT THE SCHOOL DISTRICT

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SHOULD BE CONTRACTING ACCORDING

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TO THE EXPERTS.

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AND THE NEXT CHART IS FUNDING

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HISTORY.

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EXPLAIN THIS ONE FOR US?

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>> ONE OF THE MEASURES OF

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PENSION FUND HELP IS THE FUNDED

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RATIO.

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TYPICALLY YOU LOOK FOR FUNDED

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RATIOS, YOU SHOULD BE A HUNDRED

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PERCENT FUNDED.

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THAT IS THE BOTTOM LINE.

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WHAT THIS SHOWS IS IN 2001, WE

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WERE IN FACT BASICALLY A HUNDRED

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PERCENT FUNDED.

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NOT THAT LONG AGO.

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IN THE SCHEME OF THINGS.

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WHEN YOU THINK ABOUT THE PENSION

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FUND.

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WE HAVE BEEN AROUND 120 YEARS.

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TOMORROW IS OUR 120th

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ANNIVERSARY.

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PENSION FUNDS IS LOOKING AT LONG

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HORIZONS.

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IN THE GREAT SCHEME OF THINGS

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NOT THAT LONG AGO WE WERE A

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HUNDRED PERCENT FUNDED.

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>> CAN WE SEE THAT CHART ONE

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MORE TIME?

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>> PRIMARILY WHEN YOU THINK OF

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THE GAPS BETWEEN THE LONG BARS

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AND SHORT BARS, THESE

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UNDERFUNDING CONTRIBUTED TO THE

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EROSION OF THE FUNDED RATIO, OUR

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FUNDING CONDITION.

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>> YOU ARE FUNDED NOW AT ABOUT

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50%.

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WHAT TO EXPERTS OR PENSION

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EXPERTS SAY IS SORT OF LIKE THE

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MINIMUM YOU SHOULD HAVE IN TERMS

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OF FUNDING.

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>> THERE IS SOME RULES OF THUMB.

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80% IS ONE RULE THAT PEOPLE PUT

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OUT THERE.

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IT IS NOT ACTUARIAL SCIENCE.

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THE RULE OF IF YOU ARE ABOVE 80%

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YOU ARE HEALTHY, AND WHEN YOU

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THINK ABOUT YOUR OWN SAVINGS

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PLANS THERE IS NO SUCH THING AS

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HAVING TOO MUCH MONEY.

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YOU WILL SEE SOME FUNDS IN

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EXCESS, 120% IS NOT UNUSUAL, YOU

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REALLY NEED TO HAVE MONEY SAVED

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UP FOR BAD DAYS.

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YOU KNOW, THE RETURNS ON

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INVESTMENTS ARE NOT CONSTANT.

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GOOD RETURNS IN THE MARKETS AND

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PAD RETURNS, SO YOU REALLY ARE

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TRYING TO MAXIMUM MIZE AND NO

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SUCH THING AS TOO MUCH MONEY BUT

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A HUNDRED PERCENT IS THE TARGET.

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WHAT CHANGE IS NEEDED TO BE SURE

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THAT FUTURE CHARTS, SHOW A

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GREATER HEALTH ON THE PART OF

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THE PENSION FUND.

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>> STRONGER CONTRIBUTIONS AND

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HER CONSISTENT ON THE PART OF

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THE BOARD.

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HOW DO YOU ENSURE THAT?

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>> YOU NAMED IT.

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THEY SHOULD BE CONSISTENT LIKE

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YOU ARE DOING YOUR OWN MONTHLY

212
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SAVINGS PLAN, THEY NEED TO COME

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IN ON A MONTHLY BASIS.

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A AND THEY NEED TO GUARANTEED.

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WHEN YOU LOOK AT ILLINOIS

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PENSION PLANS, EVEN WITHIN THE

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STATE, LOOKING AT THE DIFFERENCE

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BETWEEN THE ILLINOIS AND

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MACHINES PLANS, VERSUS SOME OF

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THE OTHER PLANS, THE DIFFERENCE

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IS THE MUNICIPALITIES IN THE

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STATE OUTSIDE THE CITY OF

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CHICAGO ARE REQUIRED TO MAKE

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PENSION CONTRIBUTIONS.

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YOU LOOK AT GEORGIA, AND

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CALIFORNIA, PENSION CONTRIBUTES

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ARE MANDATORY.

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SOCIAL SECURITY CONTRIBUTES ARE

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MANDATORY.

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YOU DON'T GET TO TAKE HOLIDAYS

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FROM SOCIAL SECURITY PAYMENTS AS

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AN EMPLOYER.

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AND SO FOR OUR TEACHERS YOU HAVE

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TO FUND STAND THEY DIDN'T

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CONTRIBUTE TO SURVEILLANCE

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VIDEO, THAT IS OUR SOCIAL

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SECURITY, AND MANDATORY PAYMENTS

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GUARANTEED, MONTHLY PAYMENTS,

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THESE ARE CRITICAL ELEMENTS OF A