Precision Plunger,High Pressure Plunger,Plunger And Piston,Plunger Pumps WuXi TecCeram Fine Ceramic Co., Ltd , https://www.hitechceram.com
From excerpts on Pekintimes.com:
Illinois legislators reconvened discussions last Thursday regarding a recurring topic—consolidating the state's 656 local downstate police and firefighter pension funds into one unified system. Although this concept has been circulating the Capitol for quite some time, Governor JB Pritzker, a Democrat, has provided renewed momentum by appointing a task force back in February to examine the matter.
Outside of the official task force, the Illinois Municipal League and a coalition of communities from the northwest suburbs of Chicago have taken the lead, proposing up to seven distinct alternatives aimed at reducing taxpayer expenses while improving the financial health of these retirement systems.
At present, there exists a single pension fund for downstate non-uniformed municipal workers known as the Illinois Municipal Retirement Fund (IMRF). However, communities outside Chicago with full-time, paid police and fire departments maintain separate retirement funds for their personnel, each governed by its own board of trustees and administrative staff.
IMRF stands out among Illinois' public pension funds, boasting a 90% funding ratio, largely due to state laws mandating local governments to contribute annually, even if it means increasing property taxes or reallocating funds from other public services. Until recently, this wasn’t the norm for police and firefighter pension funds, which frequently faced underfunding during economically challenging times for local administrations. Additionally, these funds were constrained by legal restrictions limiting the types of investments they could pursue. Consequently, the downstate police and firefighter pension funds currently stand at approximately 55% funded on average.
Advocates argue that consolidating these funds could yield annual savings of $21 million in administrative costs alone, translating to roughly $1,000 per member, which could then be redirected toward the pension pool. A consolidated fund similar to IMRF would also offer greater investment flexibility, potentially shielding the fund from economic downturns.
If the 69 public safety funds managed by communities within the Northwest Municipal Conference had achieved the same returns as IMRF between 2003 and 2015, their assets could have grown by an additional $978 million. This would have reduced the estimated $2 billion unfunded liability in 2016 to just over $1 billion, without raising local taxes, pushing the funding ratio from 61% to 80%.
The Northwest Municipal Conference and the Illinois Municipal League have proposed multiple consolidation models. These include merging all funds into IMRF, establishing a separate statewide system for managing only downstate police and fire pensions, creating a unified fund where existing local trustees handle daily operations, or forming two distinct statewide plans—one for police and one for firefighters. However, administrators and members of these local pension funds remain skeptical about consolidation.
One major concern raised by local funds and their members is the estimated $150 million transition cost, which some estimate could take up to a decade to recoup. The president of the Illinois Public Pension Fund Association noted that such a cost would strain budgets over the long term.
Legislative action seems unlikely until Governor Pritzker’s task force releases its findings and recommendations later this year. Meanwhile, stakeholders continue to weigh the pros and cons, hoping for a solution that balances fiscal responsibility with the needs of both communities and retirees.