You may have heard Chicago has a pension problem … to the tune of more than $35 billion of debt.

That’s money meant for city employees down the line, when they reach retirement.

The city’s pensions are underfunded, so the fear is that those retirement benefits won’t be there when workers retire.

Pensions affect nearly everyone — even if you’re not a public employee. Taxpayers have already been footing the bill to alleviate the pension debt.

See, cities are rated on their fiscal stability, and credit rating agencies frown on pension underfunding. If they cut the city’s rating, it becomes more difficult and expensive for Chicago to borrow money.

That extra cost either gets put on residents, often through higher taxes, or means less money for other city programs like schools, public safety or filling potholes.

How’d it get to this point? First, you need to know how pensions work.

They start out like most other retirement plans: A certain amount is taken out of a worker’s paycheck. That money gets invested in an effort to grow it.

But a pension is a “defined benefit plan” in which workers are guaranteed a certain amount upon retirement — regardless of how the investment performs.

That’s why Chicago needs to contribute to its four pension funds. If there isn’t enough to pay what everyone is owed, the city is on the hook to pay the defined benefits. And right now, remember, the funds are collectively $35 billion short.

So why are the city’s pensions so severely underfunded?

Some claim the pension benefits negotiated between the unions, city and state are overly generous and too difficult to keep up with.

Also, for a long time, the city just flat out didn’t contribute enough to the pension funds. Chicago was following state law, which didn’t require the city to put in more.

It’s a matter of math: Following the law still landed the pensions with loads of debt.

Now, a new law is in place. Illinois requires the city get its pensions 90% funded within the next 30 or so years.

In an effort to catch up, the city approved a new casino. Its tax revenue will go exclusively toward pension debt.

Will it be enough to fix the pension funding problem? Go ahead and place your bets.