At the podium together for the first time since his election last year, Chicago Mayor Rahm Emanuel and more than two dozen suburban mayors Thursday called for pension reform to an “unsustainable system” as their municipalities are being pushed to “the verge of bankruptcy.”
“In California, they've literally had towns on the verge of bankruptcy for the very same reasons that have been outlined here,” Skokie Mayor George Van Dusen said at the morning event at Chicago City Hall.
The mayors' calls for fundamental reforms to the state's pension system are not new, but were highlighted by Emanuel's trip to Springfield Tuesday, where he testified at the House Committee on Personnel and Pensions.
Christopher Canning, Wilmette village president and head of the Northwest Municipal Conference,
which has been working on reform for several years, noted police and fire pension obligations are forcing towns to pay significantly more each year while still losing ground. Despite paying more into its pension funds, Wilmette's unfunded liability grew from $517,864 in 2000 to $16.6 million in 2010, causing the funding rate to drop from 98 percent to 66 percent, he said.
Canning then endorsed three basic changes that “dovetail” with those proposed by Emanuel.
They including recalibrating employee contributions; “re-sizing” the annual, 3 percent compounded cost-of-living increase for retirees, and raising the retirement age to accommodate longer life expectancies.
Canning also suggested consolidating the nearly 650 separate police and fire pension funds across the state through legislation.
“We believe if you drive down the cost of those you will increase the fund balances and possibly also be able to increase returns,” he said.
Emanuel said the mayors are not attempting to “minimize the fact that this is difficult.”
Instead, he said, “we're being sensitive to everyone around the table as it relates to the changes that you're going to make. ... The reason we're all gathered is it requires the political will to resolve this to honor the work and the contributions that have been made to date.”
In addition to Van Dusen and Canning, those in attendance included Barrington Hills President Robert Abboud, Barrington President Karen Darch, Addison Mayor Larry Hartwig, Oak Brook Village President Gopal Lalmalani, Hoffman Estates Mayor William McLeod, Itasca President Jeffrey Pruyn, and Fox River Grove Village President Robert Nunamaker.Copyright © 2013 Paddock Publications, Inc. All rights reserved.