SPRINGFIELD, Ill. (Nov. 14, 2019) – Today, the Illinois General Assembly voted to consolidate more than 640 local police and fire pension funds. An amendment also added provisions that ramp up Tier II benefits for those hired after 2011. Senate Bill 1300 will now move to Gov. J.B. Pritzker’s desk for signature. By creating one...
SPRINGFIELD, Ill. (Nov. 14, 2019) – Today, the Illinois General Assembly voted to consolidate more than 640 local police and fire pension funds. An amendment also added provisions that ramp up Tier II benefits for those hired after 2011. Senate Bill 1300 will now move to Gov. J.B. Pritzker’s desk for signature.
By creating one combined fund for police and another for fire, the pooled assets in the funds are estimated to bring in as much as $160 million to $288 million in additional annual revenue, according to Pritzker’s Pension Fund Consolidation Feasibility Task Force. This would amount to between 8% and 15% of total annual taxpayer contributions to the systems. However, the new Tier II provisions did not come with any public estimates of their cost.
Experts from the nonpartisan Illinois Policy note that in addition to SB 1300 leaving 94.5% of the state’s total pension burden untouched, passing benefit increases without financial analysis is how Illinois’ pension systems were wrecked in the first place.
Statement on SB 1300 from Adam Schuster, director of budget and tax research:
“Lawmakers’ heads are in the right place by wanting to make Illinois’ pension funds more efficient and in providing taxpayers savings. But we cannot allow lawmakers to move on or celebrate a job that is hardly finished.
“Illinois still has $200 billion in state pension debt that endangers the retirement security of those who served the public. It’s irresponsible that there was no analysis to show if this fix will save the state money on net. While it’s necessary to improve benefits for Tier II, it should be accompanied by a constitutional amendment to ensure these changes are affordable.
“Ultimately, it was never a lack of revenue that created Illinois’ pension problem, but rather unsustainable growth in its liabilities. This new bill also desperately lacks any protections against a state bailout of the local funds. We must look out for taxpayers and local communities by preventing a bailout that would trigger massive statewide tax hikes.
“In order to address the root cause of our state’s pension crisis, lawmakers need to come together in support of a pension constitutional amendment that protects earned benefits while allowing for changes in the growth of future, unearned benefits.”
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