>>> 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