Pension Consolidation Our Way!
By ILFOPLC, Staff - Friday, November 15, 2019
The final Senate Bill 1300 is the most significant piece of pension legislation to have passed since Tier II, and thankfully it was nothing like the introduced bill that was based on proposals that came from the Governor's pension consolidation task force.
The initial task force recommendations were to consolidate the investments of all downstate and suburban municipal pension funds for law enforcement officers. The task force recommended combining the investments and assets into one state-run fund, eliminating all of the local funds, and did little to address the failed Tier II benefit structure.
The Illinois FOP and the Illinois FOP Labor Council opposed the Governor's task force recommendations, but we did not oppose the final version of SB 1300 because it does the following things:
- Keeps all current downstate and suburban police pension funds in place to administer the benefits, determine disabilities and handle all of the day to day responsibilities of paying benefits.
- Strengthens language which allows local pension boards to maintain the ability to determine duty disabilities.
- Provides for a reasonable timeline for the slow and methodical transfer of assets from local funds to the consolidated fund.
- Builds a firewall between the state and the new fund so the state has no authority over the consolidated fund and no access to any of the assets of the new fund.
- Creates a board consisting of mayors, active and retired police officers to oversee the fund. Active and retired police officers constitute the majority of the board.
- Eliminates the ability of municipalities to use actuarial tricks to underfund their obligations to pension funds.
- Gets rid of damaging restrictions that limit optimal investment returns on police officers' assets. This will lead to better funding for police pension funds.
- Places Tier II DNR Conservation Police, Secretary of State Investigators, Revenue Agents, Arson Investigators, Commerce Commission Police and gaming agents back into the Alternative Formula.
- Allows State Troopers to purchase up to five years of out of state service credit.
- Reinstates the Alternative Formula for University Police.
- Eliminates the mandatory retirement age for certain Secretary of State officers.
- Changes the final average salary calculation for municipal police officers to the highest four of their final five years.
- Increases the maximum pensionable salary for Tier II downstate municipal officers and indexes it to keep up with the Social Security wage base going forward.
- Provides a survivor benefit for Tier II municipal officers with less than 10 years of service.
None of these key provisions would have made it into the final bill if it weren't for the combined letter to the editor and lobbying efforts by numerous FOP members, including calls and visits with legislators. You truly helped to take us from having an untenable arrangement shoved down our throats to a positive solution that will protect our precious retirement income both now and in the future.