The administration of Donald Trump has triggered a tariff war that has resulted in significant losses for the retirement funds of Chicago's civil servants. Chicago is considered one of the major U.S. cities with the most underfunded pension funds, and it has been hit harder due to the tariff war.
On the 15th (local time), Bloomberg reported, citing the Washington, D.C.-based nonprofit organization The Equable Institute, that four retirement pension funds in Chicago have incurred losses of approximately $1 billion (about 1.4 trillion won) due to the stock market decline triggered by President Trump's tariff war.
The pension funds that suffered losses include the ▲teachers' pension fund ▲city civil servants' pension fund ▲firefighters' pension fund ▲police officers' pension fund. It is known that the S&P 500, in which these pension funds invested, experienced volatility due to the tariff war, resulting in a sharp decline in investment revenue.
Previously, after President Trump imposed reciprocal tariffs on the 2nd, the S&P 500 index had dropped 15% as of the 8th this year. After President Trump announced a 90-day deferral of country-specific reciprocal tariffs, the index rebounded, but the decline rate still reached 9%.
Specifically, the Chicago teachers' pension fund incurred losses of $593.6 million (approximately 843.8 billion won) over seven trading days from the 2nd to the 11th of this month, while the municipal civil servants', police officers', and firefighters' pension funds experienced total losses of about $344.6 million (approximately 489.8 billion won) as of the closing price on the 11th.
In particular, the police officers' pension fund, which was in a precarious state, is reported to be facing a risk of collapse due to this loss. According to the latest Chicago annual financial report, the net pension liability of the four pension funds has worsened, amounting to $37.2 billion (approximately 53 trillion won), a 5% increase compared to the previous year as of December 31, 2023.
Anthony Randazzo, director of The Equable Institute, noted on the 14th through social media platform X (formerly Twitter), "It is concerning that the portfolio losses in most state and local pension funds have reached 7-8%. For chronically underfunded pensions like those in Chicago, such losses can be catastrophic."
The fund's representatives stated that the losses are not at a critical level. W. Renaud Senior, executive director of the Chicago teachers' pension fund, said in a statement, "The current market volatility does not have an immediate impact on our fund's funding status," adding that "we are carefully investing in a diversified portfolio designed to withstand market volatility over the long term, even in uncertain times."