Excerpts from sj-r.com:
On Thursday, lawmakers held a hearing to determine if they would again push back the deadline for cities to fully fund fire and police pensions.
Under current law, cities have until 2040 to fund 90% of their pension obligations. A Democratic-led bill would push that back until 2050. The bill must be approved by the House Personnel and Pensions Committee before moving forward. It is part of the policy platform of the Illinois Municipal League, a group made up of cities and villages from around Illinois which advocates for legislative reform.
Pensions have been a major sticking point for lawmakers in Springfield, with public pension systems for state officials being underfunded for several years.
The people involved in paying pensions for police officers and firefighters have certainly started talking about the proposal.
Chuck Sullivan, president of the Associated Fire Fighters of Illinois, said there are ongoing problems with municipalities paying into fire and police pension systems and criticized the fact that the target date for funding was already moved back from 2033 to 2040 during a major pension reform in 2010.
The AFL-CIO and the Fraternal Order of Police have also registered their opposition with the General Assembly.
Despite opposition from fire and police groups, municipal leaders have come out in strong support of this proposal.
Under the current law, Springfield projects that it will pay $29.9 million into police and fire pension funds next year. Under the proposal, the city would pay $24.6 million. However, by extending the ramp, the city will pay more money in order to reach the law’s 90% funding requirement.
For example, under current law, the city will have to spend $481 million by 2041 to fund 90% of fire pensions, whereas the proposal would have the city spend $696 million by 2051 to reach the same level.
Rockford’s $22 million in annual pension payments are currently equivalent to the combined budgets for the mayor’s office, city council, legal department, finance department, information technology department, human resources department, and human services department.
#1 by Matt on February 25, 2022 - 9:36 PM
The pension consolidation bill that the article 3 and 4 boards are dealing with was a lot of eyewash. The governor wanted to look like he was doing something. I’m not sure why the IML and the various municipalities were thinking. I can’t help but think some of them were stupid enough to think it would relieve them of their responsibilities. It does not. All it does is take the investing of funds out of the local boards hands. It does help the smaller funds are far as their money can be invested in better paying investments. That’s about it. The shortages remain.
#2 by Mike on February 20, 2022 - 1:58 PM
Bill part of your comment is spot on. GARS is the worst funded pension of the 5 state pensions. And they don’t care because they make more money in campaign finances then the pensions.
Read one of my responses and you will see why you comment on switching police and fire to a 401k isn’t legal and wouldn’t work. Police and fire don’t pay into social security, they haven’t since the social security law went into affect in 1935. So switching to a 401k without changing a federal law on social security would be a disaster and honestly a slap in the face to police and firefighters. Also police and fire have a 401k program. It’s called a 457 program and it’s the same except the government entity doesn’t march contributions.
#3 by Bill on February 20, 2022 - 12:51 PM
One of the worst funded government pensions in Illinois is the GARS pension for members of the elected general assembly (state representatives and senators) if they can’t or won’t fix their own pension what would lead you to believe they would or could fix your pension? Time to eliminate pensions switch to 401ks as private industry has done. Pensions need to be taxed at the source, if you earned it in Illinois you pay Illinois income tax on it, so moving to a better state won’t help you. After all a lot of you voted for a party because it benefited you while you were employed, you need to continue to support them even if you move to a fiscally responsible state in retirement. Taxpayers are tired of supporting retired public employees who now live out of state.
#4 by Mike on February 19, 2022 - 1:03 PM
Austin I never said it wasn’t theft. I said the state isn’t the one that is misappropriating the money. The local elected officials: mayors, council persons are the ones to blame. If you looked further into this most fire protection districts are actually better funded because the pension fund is a separate taxing body. So the pension board actually levies and collects the money via taxes. The county collects the money and disburses the money to the fire districts pension fund, not the fire district. The municipalities are different because funding can come from anywhere: sales tax collections, property tax collections, etc. the municipal pension board has its actuarial done and then submits it to the municipality and the municipality has to include this into its budgeting process like anything else in the budget. That’s why it’s so easy for municipalities to underfund pensions.
#5 by Austin on February 19, 2022 - 12:36 PM
Just keep kicking the can down the road, that’s what ILL does best. The sooner towns stop dragging their feet, the sooner we can start to get this mess some what solved. They have 20 years to put money into pensions and get it to, or closer to being fully funded.
Mike it is still theft. Instead of putting it into their own pockets, they spend it on pet projects or to fund over things. That IS stealing from police and fire departments.
#6 by Mike on February 19, 2022 - 12:33 PM
Local guy your exact comment is part of why people are confused. The article 4 downstate fire pensions are not STATE pensions. Even with the consolidation of the funds for investments now they are still not STATE pension funds. The STATE has no access to the money. Even the local entities have no access to the money to use, that is illegal. The entities crime is that they choose to underfund the pensions by not following the recommendations of the actuarial. Also the pension board is a separate entity so money owed to the pension fund comes from either the county in a check to the pension fund as in the case for fire protection district, or in the case of a municipality the city is responsible for transferring the money to the pension board. So again the STATE is not stealing any money from the article 4 pension funds.
#7 by Localguy on February 19, 2022 - 11:38 AM
I said the STATE pension. And yes, they’ve been stealing from it for years. When you underfund the pension bc you wanna use the money for something else. That’s how pensions go broke. All the employees pay their share every paycheck. Politicians vote to not pay in the state’s share. Cities do the same thing. Instead of investing what they should into the pension they use the money for other projects.
#8 by Mike on February 19, 2022 - 10:25 AM
Local guy, nobody is stealing from the pensions. The state has nothing to do with local police and fire pensions regarding money, even with the consolidation they still have no access to the money like they do/ did teachers pensions. The pensions are funded locally by each entity and pensions A’s money is pension A’s only not pension B’s. RFF you’re correct they do keep kicking the can because they don’t care. Although I will say I think it’s silly that the pensions should be funded at a certain percentage level like this. It should be a fluid funding mechanism where the funding ratio is based off of the projected retirees +25% and that would give your realistic money to see. A guy starting today is a liability already and that is added to the pension funding. Jim Edgar did us no favors when he made it legal for entities to skip and underfund pensions. It’s like saying here’s a credit card with a 1,000,000.00 limit and your don’t have to pay it back at all.
In 2010 when tier 2 was signed into law the agreement was we’ll give you this if you give us the forced funding mechanism so entitled will actually pay their bills. We have them 5 years to get things together before that went into affect. And entities are still not following the law.
We need to do a better job educating the public also. The public doesn’t know that only 2 fire pensions in the state pay into social security also. So when people scream we should be in a 401k we have to educate them as to why we shouldn’t. Plus most places have a 457 which is the same as a 401k minus matching. The public doesn’t know that it would actually cost them more to have us in social security and a matching 401k then the current pension.
I will say when tier 2 was being drafted I wish the change was as follows: the pension based on any tier 2 member regardless of rank will be that of the top step firemen. This would have saved billions,.
#9 by Retired FF on February 19, 2022 - 8:42 AM
Keep moving the goal post so the municipalities can hold off on funding the pensions. The pensions will never be 90%funded because this will keep happening. The people that will suffer are the firefighters and police officers. However, the politicians will be the ones playing victim.
#10 by Localguy on February 18, 2022 - 9:19 PM
State pension is underfunded, yes. It would be in greater shape should corrupt politicians stop stealing from it.