House bill would boost pension payments for Chicago aldermen
Gov. Bruce Rauner vetoed a bill to allow former firefighters serving as Chicago aldermen to credit their political salary toward a more lucrative firefighter pension. It could come back during veto session.
A rejected House bill that would have extended new pension perks to select Chicago aldermen could see another day.
State lawmakers will reconvene Nov. 13 for veto session, during which they will have the opportunity to override Gov. Bruce Rauner’s veto on any bill from the regular session.
One of those bills will be House Bill 5342, a proposal sponsored by state Rep. Robert Martwick, D-Chicago, that would provide an exclusive pension boost to Chicago aldermen who formerly worked for the Chicago Fire Department. The bill would amend the Illinois Pension Code by redefining “active fireman” under the Chicago Firefighter Article to include former firemen currently serving on the Chicago City Council.
The bill would apply to any alderman with a history of fire department work who has served on City Council for at least five years, regardless of how long they were firefighters. Under HB 5342, applying council members would have the option to forgo their municipal pension plan and instead transfer their aldermanic pension credits to the city’s fire pension system. Rauner vetoed HB 5342 in August.
The fire pension system delivers more lucrative retirement benefits than the municipal fund. Those who stand to lose are firefighters whose retirement security is jeopardized by a severely indebted pension system, and taxpayers on the hook to cover those deficiencies.
As of fiscal year 2017, Chicago’s fire pension fund had less than 21 cents on hand for every dollar owed in benefits. In September, the Firemen’s Annuity and Benefit Fund of Chicago filed two claims with the Illinois comptroller for a combined $3.3 million shortage, alleging the city shorted it by $1.8 million in 2016 and by $1.5 million in 2017.
All told, Chicago’s combined pension debt stands at $42 billion.
Outgoing Mayor Rahm Emanuel’s solutions to the city’s pension crisis have largely consisted of massive multiyear tax hikes, including a property tax increase of $543 million, new taxes on ridesharing and e-cigarettes, tax increases on water and sewer services and 911 calls, and hikes in fees ranging from garbage collection to building permits. But those revenue increases have failed to tame the city’s pension debt. Moreover, the city’s required pension contributions are projected to more than double during the next decade.
The reforms needed to rein in growing pension costs must come ultimately from state lawmakers, beginning with a constitutional amendment, and ending with an affordable 401(k)-style alternative.
Any efforts aimed at encouraging participation in – and increasing the cost of – unsustainable defined-benefit pensions systems would be a step in the wrong direction.