* Center Square…
The governor also signed his support for consolidating the more than 630 municipal public safety pension funds to increase investment returns and save money. He said those funds are missing out on higher returns.
“Best practice is to have one pool of assets from which you’re investing collectively,” Pritzker said. “You can get into much better investment vehicles and do better.”
[Rep. Mark Batinick, R-Plainfield] said municipal police and fire pension costs contribute to the state’s second-highest-in-the-nation property taxes.
“The increased cost at the local level for local pensions dramatically increases property taxes,” Batinick said. “So if you’re going to attract business, if you’re going to grow the economy, if you’re going to stop bleeding people out of the state, you’re going to need to attack from all angles.”
Batinick said consolidation of local police and fire pension funds is much more realistic through legislative action than trying to amend the state constitution’s pension-protection clause to reduce owed benefits.
Pritzker said he’s formed a pension consolidation task force, but it has yet to produce a report.
“They’re doing really outstanding work behind the scenes to deliver to me recommendations that I hope will lead to some legislation,” Pritzker said.
Several bills promoted by the Illinois Municipal League over the past few legislative sessions to consolidate public safety pension funds have failed to advance out of the legislature.
- Thomas Paine - Thursday, Jun 20, 19 @ 3:33 pm:
Long overdue. It’s great to see GOP getting on board.
- No Dog in the Hunt - Thursday, Jun 20, 19 @ 3:36 pm:
What does Rep. Batnick have against local control?
- TheInvisibleMan - Thursday, Jun 20, 19 @ 3:37 pm:
The plainfield fire pension(in Batinicks district) is funded at over 100%. The fire department just authorized spending over 70K on a… boat. A boat that will not fit in the DuPage river. Dig more into that fire department, and find a sales rep for a fire truck/equipment company, sitting on the fire board. Guess where all the equipment gets purchased from?
What’s the excuse for the constantly rising property taxes in plainfield, while towns around them have been lowering their property tax rates, and even offering rebates, for over 5 years now.
Plainfield is the only town in its area that has not lowered its property tax rate. It doesn’t have anything to do with pensions either. Maybe having a sales rep for the company you buy equipment from sitting on your board is a contributor? Nah… must be those evil pensions.
- RNUG - Thursday, Jun 20, 19 @ 3:37 pm:
Common sense proposal that is long overdue. Hope they can pass it.
- RNUG - Thursday, Jun 20, 19 @ 3:40 pm:
== What does Rep. Batnick have against local control? ==
I don’t know what the Senator’s reason is, but those local boards weren’t always staffed with professional advisors and usually failed to achieve decent returns.
- Michelle Flaherty - Thursday, Jun 20, 19 @ 3:40 pm:
Watch the GOP members run from this once the local police and fire boards realize CHICAGO
- TheInvisibleMan - Thursday, Jun 20, 19 @ 3:42 pm:
The plainfield fire district pension in Batinicks district is fully funded, and then some.
What’s his angle here?
- Romeo - Thursday, Jun 20, 19 @ 3:47 pm:
Consolidation is long overdue. 6,500+ local taxing bodies with many that have their own pension funds. Property taxes are pushing middle-class families like mine out of the state.
- driveby - Thursday, Jun 20, 19 @ 3:48 pm:
Savings will be negligible. No evidence on that ever presented by proponents or discussed in media.
- SSL - Thursday, Jun 20, 19 @ 3:49 pm:
Makes a great deal of sense, but the devil is in the details. Keeping everything properly segregated and invested in accordance with individual plan requirements should be doable. Getting all parties comfortable that funds won’t be co-mingled or mismanaged could be more difficult. When it comes to pensions, trust is difficult to come by.
- Dance Band on the Titanic - Thursday, Jun 20, 19 @ 3:54 pm:
Nearly half the police and fire pension funds have less than $10 million in assets to invest. Combining them all into a single fund would result in a $13.5 billion investment pool.
Which do you think will attract world class investment managers and earn higher returns?
- VerySmallRocks - Thursday, Jun 20, 19 @ 3:55 pm:
The comment about “what’s long with local control” is a symptom of why Illinois has a gazillion government units that cuts across, urban, suburban, rural, Republican, Democratic, progressive, reactionary and other lines. Besides the personal power thing, many folks would rather fail locally than succeed on a larger scale.
- Anon III - Thursday, Jun 20, 19 @ 4:06 pm:
The Illinois Comptroller reports that there are 8,529 units of local government in Illinois, including districts.
- Former State Worker - Thursday, Jun 20, 19 @ 4:14 pm:
My only question is why wasn’t this done earlier?
- Proud Sucker - Thursday, Jun 20, 19 @ 4:18 pm:
==those local boards weren’t always staffed with professional advisors== AND many funds that have professional advisors and attorneys use the same group of firms as one another so, an economy of scale can be achieved through consolidation(s). Can you guess who (collectively) is against consolidation?
- supplied_demand - Thursday, Jun 20, 19 @ 4:27 pm:
Whatever happened to consolidating school districts, townships, and other government units? Rauner ran on this and it was his most achievable goal. Any idea why it has died?
- lost in the weeds - Thursday, Jun 20, 19 @ 4:32 pm:
An individual invested in lost s and p 500 fund and a total bond fund can do better than most big pension funds. What has calpers returns been? http://accf.org/2017/12/05/calpers-and-the-point-of-no-returns/
- lost in the weeds - Thursday, Jun 20, 19 @ 4:34 pm:
Bad phone typing. Lost = low cost.
- TheInvisibleMan - Thursday, Jun 20, 19 @ 4:34 pm:
@Anon III
How many SSA’s are included in that number?
Because I’m sure the people in those SSA’s(usually wealthy areas) would absolutely love for them to be dissolved and have the larger areas pick up their tab.
Think these things through. Most of the time these changes are being pushed by the wealthy for people like you to pick up the tab for their neighborhood improvements.
- Cannon649 - Thursday, Jun 20, 19 @ 4:35 pm:
Long overdue
Time to consolidate as many state and local governments agencies as possible.
Illinois needs the savings and upgrade.
- walker - Thursday, Jun 20, 19 @ 4:39 pm:
Batinick knows his numbers, and is a fair dealer.
- Larry Bury - NWMC Deputy Director - Thursday, Jun 20, 19 @ 4:40 pm:
- driveby - Thursday, Jun 20, 19 @ 3:48 pm:
Savings will be negligible. No evidence on that ever presented by proponents or discussed in media.
Not true. A study we conducted as part of the Pension Fairness for Illinois Communities Coalition compared the operating cost per participant for the downstate police and fire funds to the cost per participant under IMRF and found a difference of approximately $1,000 per participant. Consolidation into IMRF could produce a $33 million annual savings.
According to a study by the Anderson Economic Group that was commissioned by the Illinois Public Pension Fund Association (which has a vested interest in maintaining the status quo):
“Under a consolidated structure, total expenses to administer the pension funds (excluding benefits) would decrease by 25%, or $21 million annually.”
- TinyDancer(FKASue) - Thursday, Jun 20, 19 @ 4:43 pm:
Yes. Let’s put all our eggs in one basket.
This just sets my finance radar off - bells, horns, whistles, flashing red lights.
More important than consolidation is full-disclosure/fiduciary/non-conflicted advisors, low fees, diversification, and prudent investing.
Tread lightly.
- Stan - Thursday, Jun 20, 19 @ 4:57 pm:
- Yes. Let’s put all our eggs in one basket.
This just sets my finance radar off - bells, horns, whistles, flashing red lights.
More important than consolidation is full-disclosure/fiduciary/non-conflicted advisors, low fees, diversification, and prudent investing.
Tread lightly.- Ummmm IMRF doing just fine thank you.
- Anyone Remember - Thursday, Jun 20, 19 @ 4:59 pm:
Local control = nonexistent actuarial resources = post-911 pension “enhancements” w/ no valid analysis = current situation. Ask Springfield Ald. Joe McMenamin.
- City Zen - Thursday, Jun 20, 19 @ 5:03 pm:
Or they could consolidate the 630 separate police and fire pensions into combined public safety pensions by municipality. That would retain local control yet simplify things.
- Rank&File - Thursday, Jun 20, 19 @ 5:12 pm:
If they ram this thru, hope we get IMRF. Mandated employer contributions with IMRF. The biggest issue for Article 3 and 4 funds has always been employer contributions. City officials across Illinois have routinely ignored information from Dept of Insurance and other actuaries regarding what they should contribute to local pension funds.
- TinyDancer(FKASue) - Thursday, Jun 20, 19 @ 5:25 pm:
=IMRF doing just fine thank you.=
Yes, it is. But, that’s not always the case.
So, tread lightly.
- Stones - Thursday, Jun 20, 19 @ 5:29 pm:
Illinois has a population of about 12.8 million people with 2,878 separate general governmental units. Florida by contrast has a population of 20.3 million with 478 governmental units.
- Chris - Thursday, Jun 20, 19 @ 5:54 pm:
“Florida by contrast has a population of 20.3 million with 478 governmental units.”
Florida is a mess in many ways that Illinois still isn’t. Not a good comparison.
“If they ram this thru, hope we get IMRF. Mandated employer contributions with IMRF.”
Would wager that that is the subrosa plan.
- Polpen - Thursday, Jun 20, 19 @ 7:28 pm:
The somewhat concerning thing about this thread is everyone is saying that this is common sense, but at the same time the issue has been studied twice by outside financial firms twice (once by COGFA) and both studies showed significant short term costs and more than decades before the move pays for itself. It’s a very high risk transition. This idea has been brought up repeatedly and abandoned because of high risks. It should be noted that the task force meetings that were discussed are dominated by private equity representatives who stand to make considerable money when these funds are moved from local banks into hedge funds.
- Ole' Nelson - Thursday, Jun 20, 19 @ 7:52 pm:
“Rauner ran on this and it was his most achievable goal. Any idea why it has died?”
Rauner’s failure was almost universal.
- Pacman - Friday, Jun 21, 19 @ 8:18 am:
Rep. Bartnick said “municipal police and fire pension costs contribute to the state’s second-highest-in-the-nation property taxes.” They contribute to the cost of property taxes, but no where near the cost to fund public schools. That said as a retired LEO I support consolidating down state pension funds.
- foster brooks - Friday, Jun 21, 19 @ 9:10 am:
its a good deal for poorly underfunded pension funds
- Da Big Bad Wolf - Monday, Jun 24, 19 @ 9:54 am:
Lost in the weeds, All stocks are risky, and all companies are political, one can’t avoid politics. Tim Doyle’s hand wringing is kinda dumb. So CALPERS invested in some companies that tanked. Still CALPERS’ other investments must have performed extremely well, to make up for the ones that lost money. Better luck next time.