Excerpts from the southern.com:
Illinois lawmakers are considering combining police and firefighter pensions into one fund to save local governments’ money. Republican Rep. Ryan Spain of Peoria has proposed creating a single board and fund for all downstate communities. The bill is still in committee.
“In 2000, most of the Northwest Municipal Conference police and fire pension funds were 100 percent funded,” Mark Fowler, the executive director of the nonprofit Northwest Municipal Conference said. “Over the next decade we saw funding levels declining, despite contributing increased amounts to the pension funds, exposing structural flaws in those pension funds.”
The larger combined fund could also lead to more lucrative investment opportunities.
A 2012 study by the Commission on Government Forecasting and Accountability found that funds could take more than 10 years to recoup transition costs under the consolidation model, said Pat Devaney, president of the Associated Fire Fighters of Illinois. Some investments have requirements that make them difficult to be moved from how they operate.
Local boards are also more personal and efficient when reviewing applications, he said. “Considering applications for disability is a tedious, time-consuming process,” Devaney said. “I can assure you the (local) pension fund trustees closely scrutinize each application to ensure participants only receive the benefits they are entitled under the statues.”
Legislators could remove some regulations and bureaucratic hurdles to make the process more efficient, said Andrew Bodewes with the Fraternal Order of Police. He suggested reducing the number of actuaries required to analyze the funds and removing limitations on what kinds of funds the police and firefighter pension boards can invest in.
