Lawmaker: Towns stalling police, fire pension reform
SPRINGFIELD - The suburban senator leading police and fire pension reform talks blamed local governments for stalling the effort even after years of demanding lawmakers overhaul the retirement programs.
"I think that they were disingenuous," said Waukegan Democratic state Sen. Terry Link, who led negotiations on the municipal pension changes.
But one of the suburban municipal groups involved said last-minute additions were a deal breaker.
"What we ended up with was a provision that the unions insisted be in there that would have wiped out any potential savings in the bill," said Mark Fowler, executive director of the Northwest Municipal Conference.
At issue was an enforcement provision intended to make sure local governments cover the full contribution to the police and fire pension systems. It would have given the pension boards the authority to have the state intercept state tax payments to the communities if they shorted the pension systems.
The Illinois Municipal Retirement Fund, which covers local government pensions outside police and fire, has a similar power, and it's among the reasons that fund is arguably the healthiest public pension system in the state.
Fowler and other critics said if that provision were in place it would cost local governments across Illinois more than $100 million.
But Link said the local government groups are muddying the issue, and that the enforcement provision would not take effect until after an 18-month study of pension funding problems followed by a three-year deadline to act on that study. He said the local governments' arguments make him wonder if they are serious about changing the pension systems.
"They don't want to do what needs to be done, they don't want to pay into the system, or they don't want to be committed to pay into the system," Link said.
But Fowler countered that the key difference is while other local government pensions are handled by one retirement fund, there are more than 600 separate police and fire pension boards across Illinois, each with its own powers. If consolidated into one, he said the municipalities would be supportive.
"If you have an IMRF system then we'd be fine with that," Fowler said.
Link maintains pension fund consolidation to enhance investment power was an option in the pension plan that's now stalled until at least next year.
"It's everything they wanted basically, and they balked," he said.
When lawmakers overhauled public sector pension plans earlier this year, the only groups left out were local police and firefighters. At the time lawmakers said the exclusion would put those groups on an island and the added scrutiny would spur reforms there as well. Others additionally explained that police and fire jobs are unique and deserved their own proposal.
Police and firefighters can retire as early as age 50 under existing laws. The proposed change would have taken the retirement age to 55 and, rather than have the pension based on the final day's salary, would have substituted an end-of-career average, which would likely translate into a reduced pension.
In comparison, the pension changes for state, school, university and local government employees raised the retirement age to 67 in order to get a pension check.
Other proposed changes for police and firefighters would lower the maximum benefit to 72 percent of the final four years' average pay, rather than 75 percent or, in some systems up to 80 percent of the final day's pay, while also lowering survivor benefits to 66.6 percent rather than up to 100 percent.
To give local communities immediate breaks, they'd be able to push back their payment schedules in a move akin to extending a mortgage, which would result in lower annual payments now.
For now, the entire proposal is on hold.
Lawmakers wrapped up their spring session on Thursday, although there's a possibility they might return to address budget issues this summer. The fall session is scheduled for November.