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Report: Link “verging on a deal” for first responder pension reform

Thursday, May 22, 2014

* Sen. Terry Link has been attempting to put together a deal to reform local police and firefighter pension plans. Link, who voted against state pension reform, has made it clear that he wants what he considers to be a constitutional solution. WBEZ reports that Link is close to a deal. We’ll see

One proposal Link outlined during a closed-door meeting earlier this week would grant pension funds wider latitude in how they can invest their money. Illinois pension law currently restricts how much money pension funds can pour into certain types of investments - such as stocks - with smaller pension funds facing tighter restrictions, while larger ones are free to take more risks. Critics say this has hamstrung police and fire funds that might otherwise have seen bigger investment returns.

Another proposal would change the makeup of the hundreds of five-member boards that govern police and fire pension funds outside of Chicago. Right now, two members are appointed by each municipality, with two elected from the ranks of working cops and firefighters and one retiree. Municipal groups argue that leaves them in the minority during key pension fund votes. According to sources, Link wants to increase the boards to six members - three appointed by the municipality and three chosen by public safety workers - possibly with a seventh member chosen by the whole group.

A third idea would allow smaller pension funds to pool their assets and invest them together. This falls far short of the mayors’ call to consolidate Illinois’ hundreds of discrete pension fund into a single entity, similar to the fund for municipal workers around the state. But backers say it would provide more stability for funds with less money to invest.

Link’s proposed [five-year moratorium on changes to the pension law without both parties’ consent] could be a tough sell. It would mean cops and firefighters wouldn’t be able to win the sort of benefit enhancements that mayors have blamed for their public safety pension woes. But it also means mayors and municipal groups wouldn’t be able to fight for more sweeping reforms - with bigger savings - in the near future.

The firefighters and coppers always point out that they negotiated those previous pension changes with local governments.

Discuss.

- Posted by Rich Miller        


11 Comments
  1. - Enough - Thursday, May 22, 14 @ 10:41 am:

    How about turning the pension funds over to the unions and out from under state government instead of trying to micromanage everything.


  2. - Walker - Thursday, May 22, 14 @ 10:41 am:

    Hate to say it but Link’s been “verging on a deal” on gambling expansion for a decade.


  3. - Anonymous - Thursday, May 22, 14 @ 11:01 am:

    These are young person occupations and we must be careful to not change the dynamic as to have a 60+ yr old responding to alarms.
    Lets abolish other public sector pensions and follow private industry and start 401k style for new employees. Police, Fire and the Military must always be looked at differently.


  4. - Norseman - Thursday, May 22, 14 @ 11:20 am:

    I was going to say something nice, but Walker got me with his poignant observation about Link’s successful deal-making.

    Actually, from the generalities the proposal sounds like a reasonable response. Which means that Walker is right in his belief that this will not happen.


  5. - Shemp - Thursday, May 22, 14 @ 11:39 am:

    I don’t recall our municipality negotiating any pension changes in the past…. For that matter, under the arbitration system as it is set up, municipalities don’t have much room period to negotiate. There is in fact very little local control in the process in practice.


  6. - The Doc - Thursday, May 22, 14 @ 12:09 pm:

    ==Lets abolish other public sector pensions and follow private industry and start 401k style for new employees. Police, Fire and the Military must always be looked at differently==

    Another profile in courage proposal by a nameless Raunerbot. Into the spam folder….


  7. - Walker - Thursday, May 22, 14 @ 12:10 pm:

    I’m often wrong. Just sayin.


  8. - Ahoy! - Thursday, May 22, 14 @ 1:05 pm:

    –The firefighters and coppers always point out that they negotiated those previous pension changes with local governments.–

    True or not, I’m not sure, but even if it’s true it’s not a good argument. Politicians don’t make the best choices for today on tomorrow’s pensions. I think Illinois and numerous units of local government can serve as that reminder.

    The 5 year moratorium would probably help the cities, the General Assembly just can’t help themselves about giving away a benefit (and earning votes and campaign contributions) while not having to pay a dime of state funds.


  9. - Former Pension Trustee & Retired - Thursday, May 22, 14 @ 1:08 pm:

    All past legislation for pensions has been negotiated. It is state law and not under the jurisdiction of local municipalities. When Public Safety Pensions received a benefit in negotiations they also had to give something up. This is negotiation 101. The Municipal Organizations have not just ceded benefits to employees. Negotiations included the Pensions Law Committee and various organizations representing public safety personnel. Unions are not the only group that bargained with various Municipal groups for any pension law changes.

    The arbitration system that many municipalities have AGREED to use with their various Unions do not apply to Public Safety Pension Law.

    In the early 1990’s Municipalities were allowed to kick the can down the road by “refinancing” pension obligations. They all knew at that time that pension payments artificially decreased and would increase in the future. No one at the IML or other Municipal Organizations (like the DuPage Mayors and Managers) continued to have their municipality make the higher payment back then. They knew that this shortage was going to happen and ignored it. Now they want to wash their hands of the obligation and blame others for the problem.

    The responsibility sits squarely on their shoulders. The elected officials and professional managers set this in motion.


  10. - Judgment Day - Thursday, May 22, 14 @ 1:19 pm:

    There’s a reality on the ground happening inside municipalities….

    1. The building inspectors are being outsourced, or contract only. No full time, and maybe no part time - just contract.
    2. The plumbing inspector / electrical inspector are being outsourced, or contract only. No full time, and maybe no part time - just contract.
    3. The code enforcement inspectors are being outsourced, or contract only. No full time, and maybe no part time - just contract.
    4. In Cook County, the health inspector is/are being outsourced, or contract only. No full time, and maybe no part time - just contract.

    Reality is, everything not law enforcement is being looked at really hard to see if it can be cut back to (at best) part time, or contracted/outsourced.

    It’s not occurring everywhere - yet. But it is happening, and municipality workforces are slowly being hollowed out.


  11. - Chris - Thursday, May 22, 14 @ 2:40 pm:

    “Reality is, everything not law enforcement is being looked at really hard to see if it can be cut back to (at best) part time, or contracted/outsourced.”

    They’d outsource the cops, too, if it weren’t almost certain to backfire (and, you know, actually genuinely legal).


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