CHICAGO — The bill for fixing Chicago’s underfunded pension funds would cost taxpayers at least $660 million annually and without action the funds will face shortfalls within the decade, according to a report released Friday by a special pension commission appointed by Mayor Richard Daley.

At the close of 2009, the city’s four pension funds had a combined actuarial liability of more than $25.4 billion and assets with a market value of $10.9 billion, for an unfunded liability of $14.6 billion that represents a collective funded ratio of just 43%.

“Chicago is not alone — this is a challenge faced by pension plans in cities and states across the country,” city chief financial officer Gene Saffold, who served on the commission, said in a statement. “As Mayor Daley has said, as we look toward solutions, we must look at every option that helps take the burden off taxpayers, because people are concerned today about keeping their own jobs and pensions and want their tax dollars spent on improving our economy and their quality of life.”

The commission recommends that the plans adopt an actuarially based funding policy, rather than the current policy of employee contributions being based on a percentage of salary, and that contributions be increased with new sources of revenues yet to be identified.

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