Letter: Comparison is not good measure for pensions

Your June 17 article accurately describes the system for funding local police pension funds ("Which suburbs have more people collecting police pensions than officers on the job?"). But the number of pensioners compared to active employees is not an important metric in gauging pension fund health or tax burden. When properly established and administered, the revenue sources you describe (member contributions, tax dollars and investment earnings) will lead to secure funding and manageable property taxes.

Over time, the number of pensioners and survivors will grow and probably surpass the number of active officers. But this does not affect the ability of the pension fund to meet its obligations.

The pension funds for Naperville and Skokie police are both adequately funded. Skokie, an older community, has more retirees than active members, including 29 widows. Naperville currently has more active employees than pensioners, but that will likely change soon. Is Naperville headed for trouble? Of course not.

There is probably some confusion on this point because the number of active workers compared to retired individuals is a concern in the Social Security system. That's because the Social Security funding arrangement calls for active workers and their employers to cover the cost of retiree benefits. But it is not the funding method for a public or private pension fund.

At our annual Illinois pension conference in May, IPPFA presented an expert panel of pension funding researchers from Brown University and the University of Illinois - Springfield. They were asked directly if the active-to-retiree ratio was an important measurement of pension fund health. Their simple answer? No.

James McNamee, President

Illinois Public Pension Fund Association