1. The Six Most
Common
Retirement
Scenarios in
WHAT DOES THIS MEAN FOR ME? Cook County &
Proposed
Changes
Bridget Gainer
Cook County Commissioner – Tenth District
118 North Clark Street, Room 567
Chicago, IL 60614 1

2. PURPOSE
Without any changes the Cook County Pension Fund actuar y estimates
the pension fund will be insolvent by 2038. As changes are being
discussed it is impor tant to remember the impact these changes will
have on an employee.
This presentation shows examples of how changes to the Cook County
pension system would af fect sample employees across the age and
ser vice spectrum.
For the purposes of this evaluation, an illustration of an employee’s
salar y, age and year s of ser vice are compared against three options:
 No Changes: The existing pension system
 Option 1: Solvency is reached with changes to Pension Benefits only, no
coordination with healthcare
 Option II: Solvency is reached with changes to Pension Benefits coordinated
with cost savings in healthcare.
The valuations illustrate annual payout and the lifetime value of
the pension .
2

3. Current Benefits System
T i e r 1 A c t i v e E m p l oy e e s – H i r e d B e fo r e J a n . 1 , 2 01 1
 Re t i r e m e n t A g e
 Full Benefit
 Age 60 with 10 years or Age 50 with 30 years
 Reduced Benefit
 Between Age 50-60 with less than 30 years annuity is reduced by a ½% for ever y month
before age 60 or 30 years
 B e n e f i t Fo r m u l a : ( Ye a r s o f S e r v i c e ) x 2 . 4 % x ( F i n a l Av e r a g e S a l a r y ) = I n i t i a l Pe n s i o n
P ay m e n t
 F i n a l Av e r a g e S a l a r y : H i g h e s t c o n s e c u t i v e 4 ye a r s i n t h e l a s t 10 ye a r s o f s e r v i c e
 E m p l oye e C o n t r i b u t i o n : 8 . 5 % o f a n n u a l s a l a r y
T i e r 2 A c t i v e E m p l oy e e s – H i r e d A f te r J a n . 1 , 2 01 1
 Re t i r e m e n t A g e : 6 7 fo r Fu l l b e n e fi t . C a n r e t i r e a f te r a g e 6 2 fo r r e d u c e d b e n e f i t , ½ % p e r
m o n t h b e fo r e 6 7.
 B e n e f i t Fo r m u l a : ( Ye a r s o f S e r v i c e ) x 2 . 4 % x ( F i n a l Av e r a g e S a l a r y ) = I n i t i a l Pe n s i o n
P ay m e n t
 F i n a l Av e r a g e S a l a r y : H i g h e s t c o n s e c u t i v e 8 ye a r s i n t h e l a s t 10 ye a r s o f s e r v i c e
 E m p l oye e C o n t r i b u t i o n : 8 . 5 % o f a n n u a l s a l a r y
 S a l a r y f o r t h e p u r p o s e o f b e n e fi t s a n d c o n t r i b u t i o n s i s c a p p e d a t $ 10 6 , 8 0 0 i n 2 01 1 . T h e
c a p i n c r e a s e s a t 3 % o r ½ o f C P I w h i c h e v e r i s l owe r.
Retirees
 Tier 1 COLA: Compounding 3%
 T i e r 2 C O L A : S i m p l e 3 % o r ½ C P I , w h i c h e v e r i s l owe r

4. Option I: Changes to Pension Benefits
Only
T i e r 1 A c t i ve E m p loye e s
 I n c r e a s e Ret i r em e n t A g e E l i g i b il i t y b y 5 Ye a r s
 Full Benefit
 Age 65 with 10 years
 Age 55 with 30 years
 Reduced Benefit
 Between Age 55-65 with less than 30 years
 With less than 30 years, annuity is reduced by a ½% for every month before age 65
 Re d u c e b e n e f i t m u l t i p li e r f r o m 2 . 4 % to 2 . 2 % ( A p p l i e d o n l y f o r f u t ur e s e r v i c e . P a s t
s e r v i c e i s ke p t a t 2 . 4 % m u l t ip l e )
 I n c r e a s e F i n a l Av e r a g e S a l a r y f r o m h i g h e s t c o n s e c ut i ve 4 ye a r s i n t h e l a s t 1 0 ye a r s
o f s e r v i c e to t h e h i g h e s t c o n s ec ut i v e 8 ye a r s i n t h e l a s t 1 0 ye a r s o f s e r v i c e
 I n c r e a s e E m p l oye e C o n t r i b ut i o n s b y 1 %
 Re d u c e C o s t o f L i v i n g A d j u s t me n t to 3 % o r ½ t h e C o n s um e r P r i c e I n d ex , s i m p l e ,
w h i c h ev e r i s l o w e r
R et i r e e s
 Re d u c e C o s t o f L i v i n g A d j u s t me n t to s i m p l e 3 % o f ½ t h e C o n s um e r P r i c e I n d ex ,
w h i c h ev e r i s l o w e r
 Fr e e z e C O L A b e n e f i t s w h e n f u n d e d s t a t us i s b e l ow 8 0 % a n d g r a n t a 3 %
c o m p o un d i n g C O L A ev e r y f i f t h c o n s ec ut i v e ye a r w h i l e f r o z e n
4

5. Option II: Changes to Pension Benefit &
Healthcare Spend
 Tier I Active Employees
 Retirement Age Increased by 5 years over a 10 year period, starting in 2013
 1% employee contribution increase
 COLA reduced to Simple 3% or half of CPI, whichever is lower
 Healthcare paid through the County
 Retirees
 Reduce Cost of Living Adjustment to simple 3% or ½ the Consumer Price
Index, whichever is lower
 Healthcare paid through the County

6. JOSEPHINE SMITH
3 0 Y E A R O L D E M P L OY E E – T I E R 1
3 YEARS OF SERVICE
S A L A R Y: $ 5 5 , 0 0 0
Retirement Retirement Vesting Initial Lifetime COLA Employee
Age Year Pension Pension Contribution
Payment Payment
Current 57 2039 10 years $137,616 $6,045,588 3% 8.5% of
Compounding annual salary
Option I: 57 2039 5 years $107,428 $3,724,545 Simple 3% or 9.5% of
Benefits Only ½ CPI Annual Salary
Option II: 57 2039 10 years $137,616 $4,771,139 Simple 3% or 9.5% of
Benefits and ½ CPI Annual Salary
Healthcare
Josephine can retire at the same time under all scenarios because she will reach 30 years of service in
2039.
Option I reduces Josephine’s initial pension payment because the formula used to calculate the
pension benefit has been changed. Only changing the pension benefits scenario results in the lowest
lifetime pension payment of all the scenarios.
Option II does not impact the pension benefit formula, but does reduce the Cost Of Living Adjustment.
This reduction in COLA reduces the overall pension benefit by $1.3 million over Josephine’s lifetime.
6

7. JOSEPHINE SMITH
3 0 Y E A R O L D E M P L OY E E – T I E R 1
3 YEARS OF SERVICE
S A L A R Y: $ 5 5 , 0 0 0
$350,000.00 Pension Benefit
Without reform the fund will be
insolvent in 2038.
$300,000.00
Josephine will be 56 and still working .
$250,000.00
No Change at Age 57
$200,000.00 Fund goes
insolvent one Benefits Only at Age 57
year earlier.
$150,000.00 Benefits and Healthcare at
Age 57
$100,000.00
$50,000.00
$0.00
57
59
61
63
65
67
69
71
73
75
77
79
81
83
85
Age
7

8. DANIEL HUFFINGTON
55 YEARS OLD – TIER 1
30 YEARS OF SERVICE
S A L A R Y: $ 8 5 , 0 0 0
Retirement Retirement Vesting Initial Lifetime COLA Employee
Age Year Pension Pension Contribution
Payment Payment
Current 60 2017 10 years $80,783 $2,547,621 3% 8.5% of
Compounding annual salary
Option I: 60 2017 5 years $71,487 $1,828,643 Simple 3% or 9.5% of
Benefits Only ½ CPI annual salary
Option II: 60 2017 10 years $80,783 $2,137,909 Simple 3% or 9.5% of
Benefits and ½ CPI annual salary
Healthcare
Daniel can retire now under all the scenarios, but chooses to work another 5 years until age 60.
Option I reduces Daniel’s initial pension payment because the formula used to calculate the pension
benefit has been changed. Only changing the pension benefits scenario results in the lowest lifetime
pension payment of all the scenarios.
Option II does not impact the pension benefit formula, but does reduce the Cost Of Living Adjustment.
This reduction in COLA reduces the overall pension benefit by $410,000 over Daniel’s lifetime.
8

9. DANIEL HUFFINGTON
55 YEARS OLD – TIER 1
30 YEARS OF SERVICE
S A L A R Y: $ 8 5 , 0 0 0
Pension Benefit
Without reform the fund will be
insolvent in 2038.
Daniel will be 81.
Fund
Insolvency
Age
9

10. RAPHAEL GARZA
50 YEARS OLD – TIER 1
2 YEARS OF SERVICE
S A L A R Y: $ 6 0 , 0 0 0
Retirement Retirement Vesting Initial Lifetime COLA Employee
Age Year Pension Pension Contribution
Payment Payment
Current 60 2022 10 years $26,200 $826,259 3% 8.5% of
Compounding annual salary
Option I: 65 2027 5 years $37,798 $757,477 Simple 3% or 9.5% of
Benefits Only ½ CPI annual salary
Option II: 65 2027 10 years $47,371 $949,315 Simple 3% or 9.5% of
Benefits and ½ CPI annual salary
Healthcare
Raphael can retire in 2022 under the current system, but the retirement age increase under option I and
option II prevent Raphael from retiring until 2027.
Option I reduces Raphael’s initial pension payment because the formula used to calculate the pension
benefit has been changed. Only changing the pension benefits scenario results in the lowest lifetime
pension payment of all the scenarios.
Raphael’s initial pension payment and lifetime payout are larger under option II than the current system
because Raphael has to work an additional five years during which he accrues more service and
receives salary increases. Option II does not impact the pension benefit formula, but does reduce the
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Cost Of Living Adjustment.

11. RAPHAEL GARZA
50 YEARS OLD – TIER 1
2 YEARS OF SERVICE
S A L A R Y: $ 6 0 , 0 0 0
Pension Benefit
$80,000.00 Without reform by 2038 the
fund will be insolvent
$70,000.00 Raphael will be 76.
Fund Insolvency
$60,000.00
No Changes at Age 60
$50,000.00
No Changes at Age 65
$40,000.00
Benefits Only at Age 65
$30,000.00 Benefits and Healthcare at Age
65
$20,000.00
$10,000.00
$0.00
Age
60
62
64
66
68
70
72
74
76
78
80
82
11

12. AMY KIM
27 Y E A R S O L D – T I E R 2
1 YEAR OF SERVICE
S A L A R Y: $ 4 5 , 0 0 0
Retirement Retirement Vesting Initial Lifetime COLA Employee
Age Year Pension Pension Contribution
Payment Payment
Current 67 2052 10 years $158,012 $3,364,866 Simple 3% or 8.5% of
½ CPI annual salary
Option I and 67 2052 5 years under $158,012 $3,364,866 Simple 3% or 9.5% of
Option II Option I. 10 ½ CPI annual salary
Years under
Option II.
Amy was hired after Jan. 1, 2011 and is currently participating in the Tier 2 defined benefit system. Amy won’t be eligible to
retire until age 67 in the year 2052. The Cook County pension fund is estimated to be insolvent and default on retiree payments
in 2038 when Amy is 53 and still working.
Option I Benefits Only and Option II Benefits and Healthcare won’t change Amy’s benefit structure because she is already a Tier
II participant. Either set of changes will ensure that the County Pension Fund does not become insolvent and will be financially
viable when Amy retires.
12

13. AMY KIM
27 Y E A R S O L D – T I E R 2
1 YEAR OF SERVICE
S A L A R Y: $ 4 5 , 0 0 0
Pension Benefit Without reform by 2038
the fund will be insolvent.
Amy will be 53 and still
working .
Fund
Insolvency
Age
13

14. DR. ANGELA JACKSON
50 YEARS OLD – TIER 1
10 YEARS OF SERVICE
$150,000 SALARY
Retirement Retirement Vesting Initial Lifetime COLA Employee
Age Year Pension Pension Contribution
Payment Payment
Current 60 2022 10 years $109,166 $4,089,279 3% 8.5% of
Compounding annual salary
Option I: 65 2027 5 years $123,296 $2,940,601 Simple 3% or 9.5% of
Benefits Only ½ CPI annual salary
Option II: 65 2027 10 years $174,158 $4,153,674 Simple 3% or 9.5% of
Benefits and ½ CPI annual salary
Healthcare
Dr. Jackson can retire in 2022 under the current system, but the retirement age increase under option I
and option II prevent her from retiring until 2027.
Option I reduces Dr. Jackson’s initial pension payment because the formula used to calculate the
pension benefit has been changed. Only changing the pension benefits scenario results in the lowest
lifetime pension payment of all the scenarios.
Dr. Jackson’s initial pension payment is larger under option II than the current system because she has
to work an additional five years. Option II does not impact the pension benefit formula, but does reduce
the Cost Of Living Adjustment.
14

15. DR. ANGELA JACKSON
50 YEARS OLD – TIER 1
10 YEARS OF SERVICE
$150,000 SALARY
$350,000.00 Pension Benefit
Without reform by 2038 the
fund will be insolvent.
$300,000.00
Angela will be 76.
$250,000.00
No Changes at Age 60
Fund Insolvency No Changes at Age 65
$200,000.00
Benefits Only at Age 65
$150,000.00
Benefits and Healthcare at Age
65
$100,000.00
$50,000.00
$0.00
60
62
64
66
68
70
72
74
76
78
80
82
84
Age
15

16. SAM CLEMENS
47 Y E A R S O L D – T I E R 1
13 YEARS OF SERVICE
$67,000 SALARY
Retirement Retirement Vesting Initial Lifetime COLA Employee
Age Year Pension Pension Contribution
Payment Payment
Current 60 2025 10 years $73,381 $2,314,193 3% 8.5% of
Compounding annual salary
Option I: 64 2029 5 years $69,625 $1,482,655 Simple 3% or 9.5% of
Benefits Only ½ CPI annual salary
Option II: 64 2029 10 years $102,917 $2,191,619 Simple 3% or 9.5% of
Benefits and ½ CPI annual salary
Healthcare
Sam can retire in 2025 under the current system, but the retirement age increase under option I and
option II prevent him from retiring until 2029 when he will have 30 years or service.
Option I reduces Sam’s initial pension payment because the formula used to calculate the pension
benefit has been changed. Only changing the pension benefits scenario results in the lowest lifetime
pension payment of all the scenarios.
Sam’s initial pension payment is larger under option II than the current system because he has to work
an additional five years. Option II does not impact the pension benefit formula, but does reduce the
Cost Of Living Adjustment. 16

17. SAM CLEMENS
47 Y E A R S O L D – T I E R 1
13 YEARS OF SERVICE
$67,000 SALARY
$180,000.00 Pension Benefit
Without reform by 2038 the
$160,000.00 fund will be insolvent.
Fund Insolvency Sam will be 73.
$140,000.00
$120,000.00 No Changes at Age 60
No Changes at Age 64
$100,000.00
Benefits Only at Ae 64
$80,000.00
Benefits and Healthcare at Age
$60,000.00
64
$40,000.00
$20,000.00
$0.00
60
62
64
66
68
70
72
74
76
78
80
82
Age
17

18. JAMES CONNOR
58 YEARS OLD – TIER 1
20 YEARS OF SERVICE
$60,000 SALARY
Retirement Retirement Vesting Initial Lifetime COLA Employee
Age Year Pension Pension Contribution
Payment Payment
Current 60 2014 10 years $32,888 $1,037,175 3% 8.5% of
Compounding annual salary
Option I 65 2019 5 years $42,541 $842,955 Simple 3% or 9.5% of
Benefits Only half of CPI annual salary
Option II 61 2015 10 years $35,688 $897,549 Simple 3% or 9.5% of
Benefits and ½ CPI annual salary
Healthcare
James can retire in 2014 under the current system. Option I prevents James from retiring until year 2019 and
option II prevents him from retiring until 2015.
Under Option I the initial pension payment is the larger than the other scenarios because James has to work
the longest accruing more years of service and receiving more salary increases. Even though the Option I
initial payment is the largest, the lifetime pension payout is the smallest of all scenarios. James’ pension is
frozen until year 2024, receiving a 3% compound increase in 2017, because the pension funded status is
below 80%.
Under Option II James’ initial pension payment is larger than the current system because he has to work an
additional year. Option II has a lower lifetime pension payout than the current system because the COLA has
18
been reduced.

19. JAMES CONNOR
58 YEARS OLD – TIER 1
20 YEARS OF SERVICE
$60,000 SALARY
$70,000.00
$60,000.00
$50,000.00
No Changes at age 60
$40,000.00
Benefits Only at Age 65
$30,000.00 Benefits and Healthcare at age
61
$20,000.00
$10,000.00
$0.00
60
62
64
66
68
70
72
74
76
78
80
82

20. Calculation Information
 Salary: The salary listed at the top of the page is the current
salary of the employee. Salaries increase at the actuarially
assumed rate of 5% compounding annually.
 The proposed changes are ef fective Jan. 1 , 2013 for the
purposes of scenario valuations and actuary analysis.
 Life expectancy is 82 for males and 85 for females in
accordance with actuarial experience studies.
 For calculation information requests and questions please
contact our of fice at 312 -603-4210.