Chicago's pensions rack up $1B in losses amid tariff-fueled market rout

Four Chicago pension funds are estimated to have lost nearly $1 billion amid the market rout set off by President Donald Trump’s tariff policies, a blow to the city’s retirement programs that are among the least funded of all major US cities.

While the largest 25 state and local pension systems have all lost billions this year, the downturn has an outsized impact on those associated with Chicago and its school district because they’ve been underfunded for decades, according to the Equable Institute, a Washington, DC-based nonprofit that put together the loss estimates. 

The net pension liability of the four retirement funds the city contributes to rose about 5% to $37.2 billion as of Dec. 31, 2023, according to the city’s latest annual financial report. The institute’s analysis didn’t include the city’s laborer fund.

“For most state/local pension plans, these 7-8% of portfolio losses would be concerning,” Anthony Randazzo, executive director of the Equable Institute, said in a social media post on X on Monday. “For Chicago’s chronically underfunded pensions, they are edging toward catastrophic,” he said. 

For most state/local pension plans, these 7-8% of portfolio losses would be concerning. For Chicago's chronically underfunded pensions, they are edging toward catastrophic.

To start: The Police fund is only 22.1% funded and could collapse to 10% or less within years. pic.twitter.com/IK2eUtPiuN

— Anthony Randazzo (@anthonyrandazzo) April 14, 2025

The Chicago Teachers’ Pension Fund, which receives contributions from the city’s public school district and the state of Illinois, lost $593.6 million during those seven trading sessions between April 2 and April 11, according to the institute’s report. The three largest city-funded systems — which serve former municipal employees, police officers and firefighters — lost an estimated $344.6 million across all asset classes through Friday’s close.

The Equable Institute report comes after the S&P 500 gyrated in recent sessions, sending investment returns into a tailspin. Volatility surged after Trump imposed new levies on imports from numerous countries, leading the S&P 500 to close 15% down for the year on April 8 before reversing course two days later after the president announced a 90-day delay on many tariffs. The index remains down roughly 9% for the year, and other markets have lost ground as well. 

Carlton W. Lenoir Sr, the executive director of the Chicago Teachers’ Pension Fund, downplayed the losses. “The current volatility in the markets does not have an immediate impact on CTPF’s funded status,” he said in an emailed statement. “CTPF invests prudently in a diversified portfolio designed to weather market volatility over the long term, even during uncertain times.” 

Chicago Budget Director Annette Guzman declined to comment, while the other pension funds didn’t immediately respond.

Still, large losses make it harder for the funds to improve their funding levels. 

“With minimal buffer against investment losses, any market downturn becomes existential,” Randazzo said, pointing to the Chicago police pension. That plan is already operating on thin margins, similar to a “pay-as-you-go plan,” while the city’s municipal employee pension fund’s own stress test indicated a “multi-year bear market could start the process of a fiscal death spiral,” he said.