SPRINGFIELD – A working group of public officials, including mayors from across Illinois, is pursuing legislation to reform and consolidate the state’s more than 650 public safety pension funds.
Consolidating funds would ensure taxpayer and employee contributions go directly to pensions instead of overhead or administrative expenses, according to a news release Wednesday from the Illinois Municipal League, a lobbying group representing units of local government.
The IML said the reforms are necessary because smaller local pension funds see lower returns on investments than larger consolidated funds. As a result, many communities across Illinois are forced to choose between funding basic municipal services or making pension contributions.
Streator Mayor Jimmie Lansford penned a letter to the editor published in The Times and the Peoria-Journal Star advocating for the consolidation.
"Every downstate Illinois fire and police pension fund had poorer investment returns than IMRF over the past nine years (since the Great Recession, from 2009)," Lansford wrote in a July letter. "In Streator, this meant local fire and police pension funds failed to earn more than $4 million in investment returns for their pensioners during the same period compared to what they would have earned if they were in IMRF.
" ... If they were merged it would make pension assets more secure, and it would create less strain on local taxpayers, who ultimately must fund the investment shortfalls," Lansford wrote.
Kurt Snow, President of Streator Fire Fighters IAFF Local 56, wrote a response letter published in The Times in September that said the state firefighters union 15 years ago had agreed, by an overwhelming majority, to consolidate all 671 pension funds into one single fund, but the IMRF pulled out of the deal.
"The actions taken by the Illinois Municipal League 15 years ago actually make Mayor Lansford’s statements correct; it actually was a special interest group that opposed pensions consolidation, but it was not the firefighters," Snow wrote.
Democratic Sen. Steven Landek, who serves as the mayor of Bridgeview, and Republican Rep. Ryan Spain, who previously served as a member of the Peoria City Council, introduced the companion bills in the Senate (Senate Bills 1106 through 1112) and House (House Bills 1566 through 1572), respectively.
“The current public safety pension system is unaffordable for local taxpayers and unsustainable for future pension benefit recipients. We can and must do better, and that starts with consolidating municipal public safety pension funds," said Brad Cole, IML executive director. “None of our proposals call for benefit reductions. These consolidation efforts are intended to stabilize pension funds and relax the financial burden on taxpayers.”
Members of the working group include mayors from Peoria, Palos Hills, Naperville, Barrington and Macomb, as well as former state Sen. Pamela Althoff and former state Rep. Elaine Kekritz among others.
The Times staff contributed to this report