Police, fire pension changes loom at Capitol

SPRINGFIELD - Firefighters and police officers would have to work an added five years to age 55 to be able to retire with a pension and local governments would get to reset their pension payment calendars under a deal in the works at the Capitol.

The pension changes would only apply to new hires. Anyone now employed would continue under the existing pension systems. Local police and fire were left out of a pension system overhaul earlier this session. The reason, lawmakers say, is negotiations were ongoing and some of the changes for state employee and teacher pensions don't make sense for police and firefighters.

"We don't want 67-year-old policemen and firefighters," said state Sen. Terry Link, a Waukegan Democrat sponsoring the local pension changes.

Details regarding the changes emerged Wednesday during a Senate committee hearing.

The maximum police and fire pension would be 72 percent of the average of the highest four years of pay in the final decade of employment. Currently, the pension can be as high as 80 percent of the final day's pay.

In retirement, the pension would annually increase at the rate of inflation or 3 percent, whichever is less, and those annual adjustments would not compound throughout the retirement.

In addition, survivor benefits would be reduced to 662/3 percent of the pension, down from 100 percent in some instances.

Local communities would see budget relief by being able to reset pension payment schedules, effectively reducing current payments in a move akin to extending a home mortgage.

Also included is an 18-month state study of local pension systems and payment issues.

The proposal could be voted on as soon as tonight. Lawmakers are trying to meet a scheduled May 7 adjournment date.