* Illinois Municipal League press release…
As local pension costs continue to skyrocket across Illinois, mayors are pursuing legislation to reform and consolidate the state’s more than 650 public safety pension funds. Consolidating these funds could streamline investments and benefit decisions and eliminate unnecessary, redundant administrative costs, ensuring more money is available to fund pension benefits without reducing benefits.
Bipartisan legislation has been introduced by Sen. Steven Landek, a Democrat who currently serves as the mayor of Bridgeview, and Rep. Ryan Spain, a Republican who previously served as a member of the Peoria City Council. The package of legislation proposes varying degrees of reform and consolidation for local public safety pension funds in order to deliver on promises made to those who have dedicated their lives to serving their communities.
The Illinois Municipal League’s (IML) Pension Reform Working Group made the recommendation to consolidate the individual public safety funds after examining the best ways to stabilize pension benefits for hardworking public servants. Smaller local pension funds have experienced lower returns on investments than larger consolidated funds. As a result, many communities across Illinois are forced to choose between funding basic municipal services, including police and fire services, or making pension contributions. […]
“Consolidating smaller pension funds into larger funds has been shown to generate greater investment returns. Additionally, consolidation will relieve some of the burden placed on taxpayers. This is a win-win for both retirees and our communities as a whole,” said Michael J. Inman, mayor of the City of Macomb and president of the IML Board of Directors.
One proposal recommends a single downstate fund modeled on the Illinois Municipal Retirement Fund (IMRF), which remains the second largest and best-funded pension system in the state. Consolidating funds would enact efficiencies and streamline services to ensure financial contributions from both taxpayers and employees go towards pensions, and not unnecessary overhead or administrative expenses.
* The bill list…
SB 1106/HB 1566: Consolidation into IMRF, with IMRF Formula for New Hires
Consolidates all downstate public safety pension funds into the Illinois Municipal Retirement Fund (IMRF) and requires the regular IMRF pension formula to apply to all newly hired public safety employees after a certain date. Local pension boards would be abolished following consolidation.
SB 1107/HB 1567: Consolidation into IMRF, with Retained Police and Firefighter Formulas
Consolidates all downstate public safety pension funds into IMRF. This proposal would allow the benefit characteristics of these funds to stay the same, but be under the management and administration of IMRF. Local pension boards would be abolished following consolidation.
SB 1108/HB 1568: Consolidation with IMRF, for Investment Funds Only
Consolidates the investments (only) of all local pension funds by the transfer of assets and investment authority into IMRF and maintains local pension boards for each fund to administer pension determinations.
SB 1109/HB 1569: Consolidation Creating a Single Downstate Police Pension Fund
Consolidates all downstate police pension funds into a single downstate police pension fund. The fund would have one statewide board that would carry out all aspects of the fund’s management, thereby eliminating the local pension boards.
SB 1110/HB 1570: Consolidation Creating a Single Downstate Firefighter Pension Fund
Consolidates all downstate firefighters pension funds into a single downstate firefighter pension fund. The fund would have one statewide board that would carry out all aspects of the fund’s management, thereby eliminating the local pension boards.
SB 1111/HB 1571: Consolidation with IMRF, for Investment Funds Only, By City Council Action, Maintaining Local Pension Boards
Allows municipal officials to direct the local pension fund board to transfer and consolidate its investment funds into a single statewide fund. Allows local pension boards to maintain all other authority, such as pension awards and disability determinations. Participating communities would see their property tax levies for pensions be exempted from the Property Tax Extension Limitation Law (PTELL).
SB 1112/HB 1572: Extend the Amortization Period and Reduce the Funded Ratio Target
Maintains all characteristics of each local pension fund (i.e., no consolidation), extends the amortization period from 2040 to 2050 and reduces the required funding ratio target from 90% to 80%, and directs a comprehensive study be done to examine the costs and benefits of full consolidation.