* 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.