When Gov. J.B. Pritzker announced his support for a plan for the state to combine roughly 650 suburban and Downstate police and fire pension funds last month, the Illinois Fraternal Order of Police criticized the state for having the “worst in the nation” track record of managing public pensions.
On Friday, the police union — which represents more than 34,000 active duty and retired police officers — said they have changed their tune, signaling that lawmakers can get the ball rolling on the plan next week during the final days of the fall veto session.
House Deputy Majority Leader Greg Harris, D-Chicago, on Friday said he anticipates movement on the pension consolidation measure, pointing out that there have been good discussions with police groups who had initially opposed the proposal. One of their main concerns was about the composition of the governing boards.
The plan would combine the pension funds to try to increase efficiency and lower costs — while also increasing pension benefits.
The Illinois Fraternal Order of Police on Friday said the group now agrees in principle on proposed amendments that they requested to address some of their concerns.
“The revised legislation would give active and retired municipal police officers a majority on the board that will control the consolidated investments,” the Illinois FOP said in a statement. “The revised bill would allow pension funds to provide the best rate of investment return for police officers. The amended legislation would also make badly needed corrections to the unfair and flawed tiered system of pension benefits.
A pension consolidation task force last month released a report that found the funds are largely falling behind in meeting their minimum required investment rates of return, and should be consolidated to achieve substantially higher returns and to save taxpayers more than $160 million on an annual basis. It’s a plan local governments have been pushing for years — and one that would require legislation to get it running.
It’s just one piece of the puzzle to fix a statewide pension mess, which also includes $134 billion in unfunded liabilities from five statewide public pension funds and Chicago’s $28 billion in four of the city’s own funds.
The task force — led by Deputy Gov. Dan Hynes — recommended consolidating the pension plans under two new statewide funds — one for police and one for fire. As separate plans, each would have its own board in charge of its own personnel and asset management decisions, and each would remain separate from the assets of other statewide pension systems.
In forming the task force in February, the governor’s office argued that the $355 billion in accrued liabilities from the state’s pension funds are placing increased pressure on local governments and the state, driving up property taxes and crowding out funding for public services. Of the state’s 667 separate public pension funds, 656 are suburban and Downstate police and fire pension funds regulated by the Illinois Pension Code.
