State legislators are considering a law that would mandate all statewide police and fire pension funds to be consolidated into two funds because more money in a fund will yield bigger returns. Assuming that is true, I have two questions:
1. Will all localities be required to bring their respective pension balances to the same 100% funding before being added to the pool? Our local village pensions are 100% funded.
2. Once in the pool, will all localities be required to fund the pool each year to 100% of their pension liability?
I have this uncomfortable feeling that Illinois municipalities currently with underfunded pension liabilities will be depending on the fiscally responsible municipalities to keep the pool size as large as possible by maintaining their 100% funding each year, while these irresponsible municipalities continue to underfund their pension obligations.